Case
Study
ContractorHub, Inc. 
was acquired by
 Auction of the intellectual property |
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The
Situation ContractorHub had designed an online electronic procurement solution for the procurement of construction materials, services, and equipment via a negotiated exchange model. The HUB enabled the entire procurement process, from requesting quotes and ordering, through managing and locating suppliers to fulfillment and invoicing. The company was financed by a venture capital firm and a group of construction companies. The company had developed significant technology, however, it needed additional capital to continue its growth. The VC would commit additional capital, but more outside capital would still be required. The funding climate at that time was difficult and the company opted to mergefind a larger corporation in order to complete the technology and build revenues. The Response We undertook a comprehensive search for buyers. Other companies in the electronic procurement space were having their own problems, lack of additional funding being a primary one. The large construction companies had either already invested in an e-procurement company or had no interest in that sector. One buyer emerged that appeared to be an excellent fit. The technology would fold in nicely and the management teams already knew and respected each other. Price and terms had been agreed on, however, the venture capital backers for the buyer (a later-stage fund) decided that they preferred profitability over growth and did not support the acquisition. The Solution Our search revealed that there were no other serious buyers so we initiated an auction in order to sell the intellectual property, which was the primary asset of ContractorHub. We contacted a number of parties to participate in the auction and we successfully auctioned off the intellectual property.
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