Situation
FEGS Limited ("FEGS") is a supplier of advanced pre- and post- processing software for the analysis of CAD/CAM/CAE data. With its flagship product, CADfix, FEGS believed that it had developed the most advanced and effective software available to facilitate geometry exchange and data re-use between CAD, CAM and CAE systems. FEGS appointed ARC Associates in March 1998 to find a strategic acquirer that would provide both additional capital and expertise in product commercialisation to enable CADfix and FEGS's other products to achieve success in the global marketplace.
Approach
ARC Associates assisted FEGS in the development of its business plan for CADfix and built a financial model that reflected the potential global opportunity for the product. These inputs formed the core of the information memorandum sent to potential acquirers. Over a period of three months, ARC Associates contacted potential acquirers and strategic investors, distributed information, arranged meetings and presentations and actively led the negotiation of terms of the acquisition with interested parties.
The Transaction
In September 1998, US-based International TechneGroup Incorporated ("ITI"), made an offer to purchase all of the outstanding shares of FEGS. Consideration consisted of an initial share for share swap plus further potential consideration in cash or ITI shares linked to the future performance of FEGS. The transaction was completed in November 1998.