A healthcare technology company that sells its FDA 510(k) approved device and supporting dashboarding and analytic tools to hospitals was in the midst of a capital raising effort involving a one-on-one negotiation with an existing strategic partner. The company received from the strategic partner a “low-ball” valuation. The company’s management team and board of directors required assistance in supporting a more reasonable valuation.
To assist with transaction negotiations, the company engaged RNA to perform extensive secondary market research involving private company financings and M&A transactions, as well as prepare forecasts and cash flow analyses to provide multiple perspectives on valuation for the company. Drawing from RNA’s deep financial, strategic and commercial operations experience with technologies deployed in hospital systems, RNA was able to prepare forecasts and select comparable transactions in a cost-effective and responsive manner. We presented our findings to company executives and our work product was used for additional negotiations and document sharing with the strategic partner. RNA also provided a critique of the strategic partner’s valuation analysis to enhance the company’s negotiating position.
With RNA’s help, the company was able to negotiate a higher valuation and eventually finalize the transaction.