What option—an IPO, a sale to a financial buyer, or a sale to an industry acquirer—would allow the pharmaceutical manufacturer MediPacket to realize the best outcome for a value-maximizing exit?
This fictionalized case—which is based on similar scenarios for real world-companies in this industry—explores an increasingly common scenario for venture capital, growth capital, and private equity portfolio companies exploring exits: a “triple track” process simultaneously pursuing an IPO, an LBO, and a sale to an industry acquiror in the drive to maximize shareholder value in the exit. Set across the exit process of evaluating investment banks’ proposals, the case follows Amanda Shipley, CEO of the $500 million growth capital-backed pharmaceutical company MediPacket, Inc. as she led an executive team navigating the complex interplay and weighing the varied and divergent interests of buyers, sellers, employees, and advisors.
Despite being a healthy company with a solid operating record and bright prospects, different outcomes beckoned in the drive to exit. A web of complex issues lay beneath the surface, ranging from a mercurial founder to challenging regulatory issues to a growth capital shareholder impatient for a liquidity event. Would MediPacket be a public company with the attendant regulatory requirements and market exposure, but also primed for long-term independence? Would it be bought by a private equity player, which would saddle the company with debt, but also introduce a higher degree of operating discipline for the management and the possibility of leverage-juiced outsized returns? Or would it be sold to an industry acquiror with the promise of vertical integration and increased scale, but also the specter of cost synergies? Many options lay open to MediPacket, but where—and how—could it realize the best outcome for a value-maximizing exit?
Case ID: 200310