Context
A Swedish cardiology group approached us with the intention of acquiring a Czech technology startup that specializes in diagnosing heart disorders. Despite the solution’s technical maturity and scalability, negotiations quickly reached a stage where it was necessary to clearly define both parties’ expectations.
Our goal was to provide a structured analysis of the startup’s value, calculate the return on investment, and transform the established relationship into a long-term partnership in case of failure.
Our goal was to provide a structured analysis of the startup’s value, calculate the return on investment, and transform the established relationship into a long-term partnership in case of failure.
Tasks
- Determine the company's actual value and quantify the merger's benefits.
- Propose a realistic purchase price with a payback period of 2–3 years.
- Identify obstacles to the acquisition and develop a framework for alternative cooperation.
- Maintain trust and open dialogue between both parties.
Legal and strategic approach
- We analyzed operational data, licensing savings, and growth scenarios.
- Developed an ROI model with a payback period of 2 years, based on achievable value: EUR 249k from licenses and contracts; EUR 400k from sales growth thanks to CRM and cross-border diagnostics; EUR 98k in savings thanks to IT and operations consolidation.
- Valued the startup at 8× EBITDA, with a recommended price of EUR 950k–1.15m.
- After lowering acquisition ambitions, we conducted a controlled acquisition offboarding and determined the scope of a possible partnership.
Key Moment
The most important turning point came when both sides realized that the acquisition would not happen at that time. Rather than terminating our cooperation, we took on the role of facilitator. Thanks to the trust of both parties, we transformed the acquisition negotiations into a new framework for a strategic partnership.
Result
- Developed an ROI model with the potential to generate up to EUR 747,000 in the first year.
- Helped avoid a failed merger deal while maintaining strategic cooperation.
- Cooperation continues: the Czech startup is becoming the group's technology hub.
- NAWI Europe strengthened its reputation as an impartial facilitator between CEE startups and Western investors.
“Without NAWI Europe’s support, we could have lost our relationship with this exceptional startup. The unfinished acquisition resulted in an even more profitable form of cooperation.”
Legal and consulting areas
- M&A negotiations and valuation of technology companies
- ROI modeling of investments and strategic profitability
- Ensuring continuity of relationships through offboarding and facilitation of cooperation
- Preparation of a service exchange model and formation of partnership terms
Keywords
#M&A #acquisition #startup #partnership #ROI #dueDiligence #remoteDiagnostics #scaling #NAWI #techHub #digitalHealth
