WORK WE’VE DONE: CASE STUDIES

Recovering from a disaster

A raging fire destroys a key corporate facility just prior to a $60 million acquisition to be funded by issuing stock. The company’s crisis communications reverse a drop in the stock price and result in a successful acquisition.

Client Challenge: Prevent a major facility fire from affecting a strategic acquisition

A raging fire destroyed a key corporate facility and the timing could not have been worse. The company had recently announced a $60 million acquisition, to be funded by issuing stock. A significant drop in valuation would force the company to issue more shares to complete the transaction. Within a day after news of the fire reached Wall Street, the stock price had fallen more than 7 percent.

Sharon Merrill Approach: Communicating using multiple channels to quell the crisis

Sharon Merrill worked with management to quickly let the investment community know the fire would not significantly affect the company’s operations, with the goal of reversing the decline in valuation. The company immediately issued a news release and hosted a conference call to allay concerns about the fire and inform Wall Street about the company's pending acquisition, acquisition strategy and overall corporate health. Management then went out on the road to personally convey this messaging to 137 investors in group and one-on-one meetings in Boston and New York.

Results: 23% jump in valuation and a successful acquisition

Research reports written by sell-side analysts echoed the messages developed for management and specifically stated that the fire would minimally affect the company. The company’s stock price increased 23 percent from the time of the conference call to the day the acquisition closed. The company's market valuation met the parameters set forth in its acquisition agreement, and the transaction was completed without issuing additional shares.