Capella is a distributor of electronic test equipment and components to the cable tv and telecommunications industries. Originally founded by three individuals, the working relationship between two of these individuals and the third had deteriorated to the point where the third had triggered the "shotgun clause" in the shareholders agreement and made an offer to buy the inerest of the other two, or to sell his interest for the same price.

Private Capital was engaged by the two shareholders to assist them in deciding whether to accept the offer to sell their interest or to accept the offer to buy out the interest of the third individual. Our clients had 30 days to respond with a decision, and if they decided to purchase the other party's interest, they had a further 30 days to put the necessary financing in place and close the transaction. The third party already had his financing in place through the Rothschild Group, prior to presenting his offers.

Private Capital prepared a valuation of the business which indicated that the offer was undervalued. On this basis, our clients decided to accept the offer by the third party to sell his interest. Now we had 30 days to finance the acquisition.

Private Capital simultaneously contacted a range of financial institutions including the Company's existing bank. Offers to finance were received, establishing that the deal could be done. Next the challenge was to achieve the most cost-effective solution. The Company's own bank initially refused the request until Private Capital was able to reach senior levels in the bank. In the end, the Company's own bank was too slow to respond and the deal was done with a competitive bank on very favourable terms.