Thinking Outside the Box: DCI Acquired by Marlin Equity Partners
Competitive tension ensures ideal outcomes. Even when we think we know the right option, we challenge ourselves to think creatively and explore unexpected scenarios—you never know what you’ll discover along the way.
THE COMPANY
DCI Design Communications LLC. was a managed services IT provider of high speed internet access, data, hosted voice, phone/telecommunication, and unified communications solutions to the world’s top hotels, resorts, and brands.
THE GOAL
DCI CEO Charbel Zreik and team had a term sheet in hand and were ready to sell. They were convinced they had the perfect buyer and a deal was imminent, but when the deal stalled, they decided to hire a banker to run a process. After meeting with dozens of bankers, they selected PEAK to help push the deal across the finish line.
OUR APPROACH
Initially we pushed hard to complete their existing deal, but Charbel became increasingly uneasy with the terms. It became clear that the buyer wanted to merge DCI with two other portfolio companies, and they wanted a five-year commitment from Charbel to run the combined entity. We quickly concluded that the best outcome for everyone would be to bring DCI to market and to run a competitive process with multiple interested parties to generate new alternatives.
In partnership with Charbel, we wrote a compelling story and approached over a hundred targets; the competitive process was underway. Thirty interested parties signed an NDA, 12 signed up for management presentations, and ultimately 4 submitted bids—including the original buyer.
One of the targets that we approached was Marlin Equity Partners, who was not one of the likely targets. There was nothing in their portfolio that would have made them an obvious buyer of DCI, but we later discovered they were in the process of acquiring a TV business. By combining with DCI, Marlin Equity was creating a very attractive triple play (video, voice and data) solution for hotels that would become a formidable force in the market.
THE OUTCOME
The process we ran and commitment to “out of the box” thinking and outreach created the competitive tension we needed to push this deal across the finish line. Marlin Equity submitted an all-cash offer at an attractive valuation and we signed. Because Marlin Equity was combining DCI with a TV business that already had a strong management team, Charbel was able to get exactly what he wanted, an attractive all-cash buyout and the opportunity to walk away on day one and start the next chapter in his career.
