Investment Advisory Firm

Phoenix provides a Quality of Earnings review to a secured creditor for an investment advisory firm.

The Client

The Company acquires and manages operating entities with recurring revenue streams that offer pension plan administration (“TPA”), Financial and Investment Advisory Services (“Investment”), and insurance products (“Insurance”) to small and medium sized businesses in the United States and to high-net worth individuals. The Company was formed in March 2005 through a reverse acquisition with the strategy of consolidating these businesses to take advantage of cross-selling opportunities, economies of scale, efficiencies and consolidation of overhead. As of June 30, 2007, the Company owned 12 TPA operating units, 4 Investment operating units, and 1 Insurance operating unit across 10 states. 

The Challenge

Since its inception in 2005, the Company had experienced significant growth as it executes a strategy of growth through acquisition. During that time, the Company’s existing capital structure had become too costly and cumbersome as they looked to increase their target company acquisitions. Phoenix was brought in by the secured Creditor to assist in the financial due diligence of the Company in order to restructure the debt thru the syndicated lending marketplace. Phoenix was tasked with reviewing the Company’s trailing twelve month historical operating performance for each of the 17 operating entities and identifying any inconsistencies with internally generated reports as a means of validating EBITDA. Further, Phoenix was used as an independent reviewer of the Company’s cash management structure and billing practices.

The Solution

Phoenix prepared a written financial report that opined on the validity of the Company’s historical financial results, as well as, outlined the operating risks and mitigants inherent in the Company’s growth strategy. This report was utilized by the participating senior secured creditors interested in financing the recapitalization of the Company to enable future growth. 

Phoenix Transaction

Primary Industry

  • Services

Secondary Industry

  • Leasing / Financial Services

    Primary Services

  • Quality of Earnings