Tracor, Inc.

By 1996, Tracor had reached about $1 billion in sales, virtually all of which was defense-related. As a result of Tracor's successful bankruptcy recapitalization, Westmark Systems (Tracor's former 100% equity owner) received 10% of Tracor's common stock and a block of common stock warrants, resulting in a fully-diluted equity ownership position in excess of 40% of Tracor. Tracor wished to simplify its capital structure by eliminating the warrant overhang.

Gordian Group initiated Tracor's acquisition of Westmark, and assisted Tracor in the negotiation of the terms of the acquisition, in which Westmark received common shares of Tracor worth $158 million. Key to the terms of the exchange was Gordian Group's valuation of the warrants through (i) comparison with other "in-the-money" publicly-traded warrants, (ii) theoretical warrant pricing models and (iii) various scenarios valuing the future intrinsic value of the warrants. Gordian Group delivered a fairness opinion to Tracor's Board regarding the transaction.