Middle Market Deals and how to buy, sell and raise capital from $5 to $500 million

Jim Sorenson, founder of a variety of entrepreneurial ventures, including Sorenson Capital, Sorenson Media and Sorenson Voice Relay Systems, is the founding sponsor of the University Venture Fund and was the dinner speaker at the University Private Equity Summit on Friday evening. Personally, I think it is best when the speaker is the most impressive person in the room, and that certainly applied at this event.  Wealthy and professionally accomplished in his own right, Jim is the son of James L. Sorenson, #177 on the Forbes 400 List.

For me, the highlight of his presentation was the detailed description of the auction process used to sell Sorenson Communications recently.

First, he decided he wanted great representation. To get it, he screened a variety of investment banking firms to narrow the choice to three. Then he met and had presentations with each, two of which were large firms, the third being a boutique shop that specializes in cable television deals. Ultimately, he chose Lehman Brothers.

Together with his new advisors and management team, they decided to conduct a full blown auction. They created a book that was distributed primarily to private equity groups. This attracted 13 bidders. They then asked for definitive expressions of interest and 10 of the 13 decided to participate, considerably more than the three or four they'd expected.

Next, they put together a data room and put all of the diligence material on-line. Included in the data room were all of the proposed transaction documents. As part of the proposals from bidders, a complete set of documents was required, with the understanding that drafts with fewer substantive changes to the seller's proposed draft would be viewed more favorably than those with more. This allowed for the plan to require a very quick close following the auction.

In fact, the winning bidder did close just 10 days after the auction ended. That bidder used the ten days to execute employment agreements ith key managers. Jim noted that one of the keys to success for the winning bidder was creative leverage.

It was a remarkable experience to hear this level of detail shared in a public setting by one of the wealthiest people I've ever met.  This was graduate level education if ever I've heard it.

I would love to hear more about your experiences as entrepreneurs and executives in orchestrating your best deals!