2006-2007

Deal description: Distressed turn-around

In a little more than a year, Stanmore Captial engineered the transformation of Avastra from a failing medical device company to the second largest sleep centre company operating in the US.  Avastra provides sleep diagnostic services to patients as well as conducting clinical trials for pharmaceutical companies in the area of sleep. 

When Stanmore Capital was introduced to the company in 2006, it had no revenues, less than $3 million in cash and losses of $5.5 million since inception. The company had invested heavily in a surgery technology that failed in clinical trials.  Stanmore was recruited by major investors to create and initiate implementation of a turn-around strategy, with heavy, hands-on involvement during the first 18 months of the engagement, from April 2006 to October 2007, and a limited advisory role thereafter.

Stanmore Capital was charged with three goals to increase shareholder value: (1) to work with the board and management to change the direction of the business to acquire sleep centers in the US; (2) to source, qualify and close acquisitions in the United States that would lead to a nationwide footprint of sleep centers; (3) to provide capital, underwriting and equity banking services to the company to finance the acquisitions.

Stanmore Capital Managing Directors Dalsin and Greene joined the Board of Directors for a brief period successfully navigating the company through a change of business process on the exchange, culminating in a successful shareholder vote in August of 2006.

Stanmore led the investment rounds totaling more than $30 million to finance acquisitions, to provide working capital and to buy out an early stage investor over an 18 month period.

Stanmore Capital closed 9 sleep center acquistions from California to New York, totaling more than $45m in annual revenue and providing Avastra with operational profits.

The company reached a market capitalization of $80 million by July 2007, with an eightfold increase in share price from early 2006. When Stanmore invested, the market capitalization of the company was less than $3 million. By the conclusion of Stanmore’s comprehensive engagement, the company has a market capitalization of over $50 million.

Stanmore Capital continues to act as a special advisor on acquisitions. After finalizing a 55 cent equity placement in December 2007, Stanmore Capital ceased acting as full service bankers for the company at the end of 2007.

Life Therapeutics (ASX)

2003-2005 (formerly known as Gradipore)

Deal description: Distressed turn-around

Life Therapeutics collects, refines and sells plasma to immunoglobulin producers. When the company first contacted Stanmore Capital in 2003, it was trading at AU$0.33 on the Australian Stock Exchange (ASX). It had sales of US$2.1M and losses of US$10.5M. The company had invested heavily in a novel plasma separation technology that had slow market adoption.

Stanmore Capital was charged with three goals to increase shareholder value: (1) to identify, qualify, negotiate and close cash flow positive acquisitions of plasma collection companies in the US that would increase sales and profits, as well as enhance their current technology sales; (2) to provide US-based debt financing for these acquisitions; and (3) to interact with current and potential investors in the capital markets to provide capital, underwriting and equity banking services to the company to raise several rounds of equity financing needed for the acquisitions.

In the beginning of 2004, Stanmore Capital principals found, negotiated and financed the purchase of a business based in Atlanta, Georgia with Revenues of $30 million and profits of US$3M. At the end of 2004, Stanmore engineered and led a further equity placement with investors. During 2005, Stanmore negotiated and lead a finance round for a further acquisition of a company with $15 million in revenues.

The company reached a market capitalization of $210 million by July 2005, a six-fold increase in share price from early 2004. When Stanmore invested, the market capitalization of the company was less than $12 million. By the conclusion of the Stanmore Capital engagement, the company had a market capitalization of over $200 million.  The company ultimately entered into a contract to sell the assets that Stanmore Capital sourced for a price three times greater than the price Stanmore Capital had negotiated.

Resonance Health (ASX)

2005 - 2007

Deal description: Undercapitalized with promising revenue generating technology

Resonance Health provides liver diagnostic services with a novel MRI technology that is non invasive.

When Stanmore Capital was introduced to the company in 2005, it had no revenues, less than $1m in cash and losses of over $5m since inception.

Stanmore Capital was asked to assist with three goals to increase shareholder value: (1) to work with management to augment its technology with acquisition of profitable US-based MRI, pathology or radiology businesses and to provide capital for these acquisitions; (2) to provide capital, underwriting and equity banking services to the company to finance the research & development and acquisitions; and (3) to work with key clients including Novartis to renegotiate pricing of the diagnostic service.

Stanmore Capital Managing Directors Dalsin and Greene joined the Board of Directors, along with a well known director from ResMed (NYSE: RMD) for a brief period, successfully attracting the largest pension fund in Austalia, Queensland Investment Corporation (QIC), as a co-investor to Stanmore, as a substantial shareholder (20% stake).

Stanmore Capital sourced and qualified over 30 potential acquisition targets, however, pricing for these assets was too high to justify investment by the company.

Stanmore Capital successfully renegotiated contracts with the largest customers of the company resulting in an increase in pricing of more than 4 times and making the company operationally profitable for the first time.

Stanmore Capital ceased active banking services for the company in May of 2007. Stanmore never made an investment in the company, acting solely as advisor.

Ambri (ASX)

2007

Deal description: Distressed turn-around

Ambri is a listed company which has investments in other companies in Australia. 

When Stanmore Capital was introduced to the company in 2007, it had no revenues, less than $5m in cash and losses of over $140m since inception. The company had invested heavily in a novel health diagnostic technology.

Stanmore Capital was asked to pursue three goals to increase shareholder value: (1) to advise the management to change the direction of the business away from technology development, cutting costs and selling assets; (2) to recapitalize the company, providing capital, underwriting and equity banking services, finding a local cornerstone investor and (3) find directors and managers appropriate to the new company strategy.

Stanmore Capital successfully attracted a large local pension fund in Australia as a substantial shareholder (13% stake).

After a strategic review and planning process, Stanmore Capital worked with the company to finalize an investment strategy whereby Ambri would take significant stakes in other promising companies in the Australian market.  Ambri currently holds 5% of Avastra.

Stanmore ceased active banking services for the company in May of 2007.

Privately Held Leverage Buy Out

Metabolife

2002-2003

Deal Description: Distressed turn-around

Metabolife is a nutraceutical company focused upon weight loss products with sales exceeding $100 million.  In 2002, while the company had strong name recognition and excellent channels, it was quickly losing revenue due to an assortment of legal problems and concern about ingredient safety. 

Stanmore made an offer to purchase certain assets of the company, subject to securing debt financing to close the transaction. Stanmore Capital was engaged to reposition certain aspects of operations, including a separation of assets associated with legal claims. This was necessary to secure debt financing and make it possible to close.

Stanmore Capital brought in expertise needed to change the ingredients in major weight loss products, restore consumer confidence, introduce new marketing techniques and lower overhead and cost structures. The changes implemented by Stanmore Capital attracted new investment offers in the company.  Stanmore Capital was paid a “break-up” fee in lieu of the purchase.  The company is now owned by ISI Brands.

International (Europe, Asia and Australia) Merger & Acquisition Advisor, Fund Asset Advisor and Public Equity Advisor Clients

Selected Clients:

International investment funds:

SITRA – The Finnish National Fund for Research and Development

2002 -2005

SITRA is a Euro2B investment fund for the benefit of the citizens of Finland.  SITRA invests primarily in companies that focus on technology and life sciences, and is best known for an early investment in Nokia to facilitate its change of focus from paper and lumber to cell phones. Stanmore Capital advised SITRA on acquisition and investment alternatives on a certain portion of the portfolio and aided certain companies in the portfolio as full service bankers (M&A, equity, and debt).

Queensland Biotech Fund (QBF), a holding of Queensland Investment Corporation (QIC)

QBF was established by the QIC in October 2002 as its venture capital arm specializing in biotechnology.  Like any other QIC Fund, QBF’s purpose is to maximize investment returns for QIC’s clients. The Fund invests in listed or unlisted companies which are commercializing Australian discoveries in drugs, devices or diagnostics. Stanmore Capital advised QBF on acquisition and investment alternatives on a certain portion of the portfolio and aided certain companies in the portfolio as full service bankers (M&A, equity, and debt).

Various Singaporean National and Private Funds

Principals of Stanmore Capital have worked with the Economic Development Board (EDB) of Singapore and A*Star, the grant organization in Singapore on various cross border deals. Stanmore Capital has also been asked to review certain assets in investments made by large Singaporean-based state and private funds. Stanmore Capital maintains extensive contacts with fund sources and the government in the country.