Case Study

Senior Solution: Raising capital for growth

10 pages
August 2016
Reference: IMD-7-1781

Among other topics on the board’s agenda was how Senior Solution, which specialized in software solutions for financial institutions, could maintain its financial growth of the past few years. Would new funds be needed to support that growth? And, was it the right time to provide additional liquidity to some of its shareholders? Having paid cash for all its deals, Senior Solution’s management knew that the time would come when they would need more resources to continue pursuing their growth plan. Senior Solution’s products were present in more than 130 financial institutions. It had been the main consolidator in the sector, acquiring and integrating five companies over the past six years to complement its portfolio of solutions. But the outlook for new investments seemed promising. By taking an active role in consolidating the sector, Senior Solution could strengthen its product portfolio even more, to serve its customers even better. However, this also posed significant finance challenges for the company, given its capacity to generate cash from its current operations. Furthermore, the company now had a mix of investors, with different expectations in terms of returns and liquidity. So, how could it raise the money? A trade sale was one possibility. But who could the buyer be? Also, what would this mean for the current shareholders and managers? A share issue was another possibility, but how should it be structured? Would the market be ready for a Fintech IPO? The timing of any capital-raising activity was a challenge, since the window of opportunity in Brazil was typically short. After all, the number of IPOs in Brazil over the last two years “could be counted on one hand.” But if the partners decided to go for an IPO, who should it issue shares to? What could potential new ownership structures look like? Alternatively, should it try a private offer to a group of financial investors?

Learning Objective

Senior Solutions needed new capital to continue its organic. The case provides an opportunity to discuss the links between finance and strategy. It allows for an analysis of capital raises, valuation, emerging markets, IPOs and ownership structures, PE investors, and growth strategies in creating firm value. It also provides an opportunity to analyze a variety of strategic, organizational, financial and economic issues associated with emerging markets.

Initial Public Offering, Mergers and Acquisitions, Value, Voting, Capital, Emerging Economy
Manufacturing, Technology, Finance and Insurance, Financial Services
Field Research
© 2016
Available Languages
Case clearing houses
IMD case studies are distributed through case clearing houses. In order to browse the collection and purchase copies please visit the links below.

The Case Centre

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Email [email protected]

Harvard Business School Publishing

60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]

Asia Pacific Case Center

NUCB Business School

1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]


Research Information & Knowledge Hub for additional information on IMD publications

Discover our latest research
IMD's faculty and research teams publish articles, case studies, books and reports on a wide range of topics