About the Company

Clarity Systems, founded in 1996, is a leading provider of software solutions for Corporate Performance Management (CPM) and Financial Governance (FG).

The Challenge

In early 2010, the co-founders of Clarity received unsolicited interest for its FG division. At that point, they were faced with multiple questions:

• Do you sell the entire business or only divest the FG business?
• How to benefit from valuation discrepancies between each line of business by each investor/buyer?
• What are the other options for liquidity?
• Can management maintain control of a go forward business?

The Solution

Arbor ran a parallel process producing multiple transactional structures:

• Sell the entire business to a strategic software vendor
• Divest FG business line to a strategic software vendor
• Minority stake recapitalization by a financial sponsor
• Majority stake investment by a financial sponsor

After producing multiple bids with various structures and attractive valuations, management sold the entire business to IBM. This provided significant liquidity to the principals while providing the framework necessary to bring their leading financial governance solution to the next level. More than 400 financial management experts from Clarity will join IBM.

Arbor Value Add

• Increased original bid by 92% over the 10 month process
• Spearheaded a complex deal process with multiple bidding rounds for different categories of investors/buyers with various transaction structures
• Maximized valuation for each potential structure and type of investor/buyer
• Drove key negotiating terms by implementing a non-exclusive process