Case Study — Government Infrastructure Contractor

The Opportunity

Understanding the Opportunity

IDIQ Contracts

Multi-year Government IDIQ contracts providing stable, recurring revenue streams.

Business Profile

Generational business with a strong market reputation. Owner-operator seeking transition and significant liquidity.

Balance Sheet

Bonding company required large cash reserves on the balance sheet and the owner sought to distribute and free up capital at closing.

Concentration

Customer concentration required careful buyer positioning and proactive diligence management.

WIP Accounting

Percentage-of-completion accounting creates overbilling and underbilling positions across active contracts, requiring careful analysis of working capital, purchase price adjustments, and backlog reliability.

One-Time Event

A historical one-time event was addressed transparently in marketing materials and management presentations.

Transaction Process

Engagement & Buyer Intelligence

Step One

The Engagement

First Mergers Group selected as exclusive advisor.
Preliminary market valuation established for the business.
Owner prepared for a disciplined, controlled sale process.

Step Two

Buyer Intelligence & Materials

Buyers were identified through longstanding strategic and private equity relationships that matched the client profile.
Buyer universe refined around WIP accounting understanding and significant bonding requirements unique to government contracting.
Buyer list approved by client with focus on strategic acquirers.
Marketing materials included a two-page teaser, CIM/business summary, and a management presentation.

Transaction Process

Confidential Marketing

Direct Outreach

Targeted outreach to key decision-makers — CEO, CFO, EVP — for initial confidential discussions without signaling a broad process.

Teaser & NDA

Confidential two-page teaser distributed to interested parties. NDAs required before any further materials were shared.

CIM Distribution

Executed NDAs were required before release of CIM. The CIM was distributed only to qualified, vetted parties maintaining process discipline.

Management Presentations

Management presentations were facilitated and attended by First Mergers Group, ensuring consistent messaging and momentum.

Transaction Process

Negotiations & Closing

Step Four

Negotiations

Indications of interest (IOI) received and evaluated across all qualified parties.
Letter of intent (LOI) negotiated with the selected buyer.
Key economic and structural terms finalized.
Buyer selected based on valuation, structure, and execution certainty.

Step Five

Closing

Company prepared for the buyer due diligence process.
Due diligence information flow managed and coordinated by First Mergers Group.
Buyer questions addressed promptly; transaction momentum preserved.
Communication managed between buyer and seller through closing.
Legal documentation coordinated with counsel and all counterparties.

Throughout diligence and closing, First Mergers Group actively managed communication, preserved transaction momentum, and maintained alignment between buyer and seller.

Transaction Outcome

Results That Exceeded Market Benchmarks

Cash-Free Structure

Owner distributed balance sheet cash prior to closing. Maximum personal liquidity achieved through an all-cash purchase price.

Above-Market Valuation

Final valuation exceeded market benchmarks on both equity and EBITDA multiples, driven by the competitive process.

Post-Closing Earnout

Additional upside secured through a structured earnout, giving the seller meaningful participation in future performance.

Owner Retention

The owner retained under a multi-year employment agreement, ensuring leadership continuity and preserving client relationships.

Exclusive M&A Advisory

A Controlled, Strategically Focused Sale.

First Mergers Group delivered an outcome that exceeded market benchmarks — maximizing value for the owner while ensuring a seamless transition.

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