Matrix Capital Markets Group (804) 780-0060

Case Study: Addressograph - Management Buyout

Situation

DataCard Corporation, a thriving $350 million manufacturer of photo ID, embossing and encoding systems realized that its Addressograph Division, whose primary product is pressure sensitive credit card imprinters, had been declining due in large part to competition from more advanced magnetic technologies.
Consequently, DataCard decided the best strategy was to divest Addressograph and subsequently offered the division to the existing management team for $14 million.
Deciding that the price seemed steep, the management team engaged Matrix to advise them on the transaction.

Solution

Matrix thoroughly analyzed Addressograph and identified key areas of operation that would justify a lower purchase price. Because of this analysis, DataCard finally agreed to sell the division for only $8.5 million.
Matrix then arranged long-term financing that required the management team to provide only 10 % cash at closing.
Only 11 months after the transaction closed, Matrix successfully engineered a $23 million recapitalization of Addressograph that resulted in management realizing $21.2 million in liquidity while still maintaining a 45 % ownership stake in the new entity.