In April 2002 Alex de Werra, director at TCFG, was contacted by a fellow alumnus of IMD for advice on a possible management buyout of Kermel, a French textile company. Although De Werra handled this kind of transaction routinely, this mandate was very challenging. The vendor was in a rush to sell and De Werra had less than two weeks to convince a private equity (P/E) investor to submit a competitive bid. This case illustrates the key role played by M&A advisory firms in engineering P/E transactions. It also addresses the major dilemma they face in purchase mandates wherein they have to protect the interests of the management team but are often compensated by the P/E firm. This case is interrelated with two other cases that focus on the other actors of the deal: Venkatesh Tulluri, who took the decision to engineer the MBO and would become Kermel’s CEO, and Argos Soditic, the PE investor.
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