portion of BearingPoint’s North
American Public Services practice for a
headline price of $350 million in cash.
That agreement, which blended
elements of a typical stalking horse
asset purchase agreement and more
traditional government services M&A
agreements, allowed Deloitte time to
continue evaluating contracts and
maintain the required personnel to staff
those contracts until the final closing.
At the transaction’s conclusion, Deloitte
acquired a highly desirable unit from an
otherwise highly flawed parent, bringing
with it ongoing contracts with numerous
U.S. government agencies, as well as
the people who delivered the services
under those contracts. Ultimately,
many buyers carved up the remaining
portions of BearingPoint, leaving no
trace of a “prearranged” restructuring.
The BearingPoint case study teaches
several lessons. First, while nothing
beats good planning and free fall filings
are always problematic, bankruptcy
filings do not necessarily mean the
death of businesses or the jobs that go
with them, including those businesses
operating in the government market.
Further, although a government market
Charles C. Reardon (top) is the senior managing
director of Asgaard Capital, a boutique investment
banking and restructuring firm based in Vienna,
Virginia. When formerly at Houlihan Lokey, Reardon
advised Deloitte on the BearingPoint transaction.
Douglas M. Schmidt is the founding partner of
Chessiecap Securities, investment bankers to
growth and technology companies in the Mid-Atlantic, based in Bethesda, Maryland. Schmidt
has 20 years of experience in the government
services market. Asgaard and Chessiecap
collaborate on challenging and complex corporate
finance situations. Reardon can be reached at
firstname.lastname@example.org, and Schmidt
can be reached at email@example.com.
company filing adds unique wrinkles
with which to deal (e.g., contract
termination and novation), bankruptcy
tools can still be effective for both buyers
and sellers in the reorganization or
sale of a government contractor faced
with capital structure challenges. J
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