Our client company produces a diversity of precision machined parts for OEMs. It enjoys a reputation of high quality and reliability, catering to a wide range of companies throughout New England and the nation. It enjoys repeat business and is tenacious in serving customer needs.
The owner invited us to talk about next steps. The company had grown remarkably through the years. However, its can-do reputation and determination for rapid turnaround also kept the owner locked to a desk and computer. After taking the first real vacation in years, the owner returned with a different vision: a rapid path to “life after business.”
Initially, liquidation was a serious consideration. It would offer a quick exit but would hurt loyal employees and disrupt the customers who had come to rely on its quality production. We suggested a valuation study, which revealed liquidation would be the worst option. In fact, the company was highly profitable, had good systems in place and was poised to be effectively transferred. We proposed a sale.
Although the company fit into the “job shop” category, it performed substantially above average and was tenacious in pursuing efficiencies that could be repeated in future orders. This would make it highly desirable. We would look for a buyer with industry experience who would also retain the plant, owned by a separate but related entity, and the highly skilled workers who were like family to owners.
We went to market, approaching a series of industry players with a focus on those seeking a second location or market sector diversification. Several companies were interested and met with our client, including an investment group assembling a manufacturing group within the Boston area. Several letters of intent were received, and one was selected. We facilitated a thorough diligence process with records provided via our data room. This enabled the owner to stay focused on business.
Owners received price and terms that met their goals. From start to closing, the engagement lasted 10 months. The President would remain as a consultant for several months, transitioning customers and assisting new management. The staff was retained and new jobs created to enhance engineering, quoting and job origination. The buyer group leased the facility for years into the future, another financial benefit to the owner.
Business Transition Strategies is a New England-based mergers and acquisitions firm advising owners of privately held companies how to navigate the sales process. Our team of professionals also provide advisory services to help prepare for a sale down the road. We also provide buy-side assistance. If you are considering a transition, now or in the future, contact us to begin the discussion.
"The entire process went smoothly and professionally. The BTS team kept me fully informed at every step. They worked hard and were effective in bringing the deal home."
"Skip and I continue to be grateful for all you have done to make the sale of Pure Flow come to fruition."
"BTS’s level of expertise in the process and close attention to detail enabled us to successfully navigate the deal."
"These types of transactions are often long and complicated and I doubt it could have been successfully completed without your close ongoing involvement."
"The outside objective point of view that you have brought us has been invaluable as we prepare for the rapid growth."
"John then found the right buyer and coordinated a seamless transition—he doesn’t miss a single detail."
"John immediately identified our strengths and experiences and discussed a business that ultimately was more in line with our goals."
"The BTS team came in, evaluated everything in a professional and thankfully non-threatening manner."
Looking Back to Plan the Future
As one year closes; another is just beginning. It is an excellent time for company owners to consider the options for what is next.
Growth Through Acquisition in the Lower Mid-market
Growth through acquisition has been a strategy largely used by mid-sized and larger companies for years. Now firms in the lower mid-market are getting into it as well.
PEI Cites 8 Attributes of Quality Deals
Quality deal flow is among the top concerns for M&A advisors. A recent blog posted by Private Equity Information offers 8 key attributes of “quality deals.”
In an M&A Program: Why Consider a Business “Carve Out”?
An M&A program need not be limited in the search to the complete acquisition of a company.
The BIA Report on Consumer Confidence
"NH consumer confidence remains high" according to the latest BIA Survey conducted October 10 and October 18, 2018 by the UNH Survey Center.
Business Transition Snippets
Here are a few observations we culled from sources we regularly review that relate to business transitions.
What to expect in the LOI exclusivity period
A question that often emerges when reviewing proposals for acquisition with owners is the exclusivity period.
Growth through acquisition isn't just for the big companies
Growth through acquisition Is a valid strategy for businesses in the lower mid-market as well as the mid-market.
The exit decision- timing and issues
When should a business owner start thinking about planning their exit? Early! This is a high-stakes decision and should not be first contemplated when it is imminent.
April PEG investments
It is interesting to watch trends in private equity investments. In general, they reflect confidence in the value of making things. Transactions give insights on the broader acquisition environment, p
Precision Machining Company
Initially, liquidation was a serious consideration. It would offer a quick exit but would hurt loyal employees and disrupt the customers who had come to rely on its quality production.
Green Product Company
Our client owners could dig in for the long haul…However, this would take five years or more. Owners simply lacked the horsepower to do it.
Water Purification Company and Young Buyers
Owners decided they wanted to retire. They also wanted to be fair to the staff who had been loyal to them. Could the company be sold, the staff retained and the facility remain in use?
Magnetics Company with High Profile Customers
(T)he manufacturer would need to focus on growing EBITDA to capture interest from major strategic buyers and achieve a higher multiple of earnings.