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Green Product Company

Our client manufactured and distributed its own waterproofing products that are environmentally sensitive yet highly effective. The niche products contain no VOCs, qualifying them for favorable environmental designations including being Green Spec™ listed, Singapore Green Label Certified, and additionally could enable those in the construction or design field to gain LEED credits by using or specifying the product. With a strong commitment to marketing, our client grew sales organically through independent stores, small chains, cooperatives and to resellers. The question was how to convert the hockey stick sales growth to the next level?

Possibilities and Concerns:

Our client owners could dig in for the long haul, invest in a management team, leverage the distribution paths already in use and continue to grow top line revenues. The firm would need to implement a tighter structure to enhance the bottom line. Further, a national sales team would be needed. However, this would take five years or more. Owners simply lacked the horsepower to do it.

Production and Sales Channels:

Production was being done in small batches, with inventory of core elements made at a sister plant 1500 miles away. The final blend and packaging was being done at the sales office, then shipped to end users. This created logistics and timing challenges. The solution would be to combine the divisions into one location.

Choices, Choices:

Owners were initially bearish, but came to realize that building would require additional investments and years of work. Retirement would have to be put off. Selling would not be easy, either. The product was young and sales seemed on the threshold of exploding.

The Plan:

Take the coatings products, intellectual property and business operation to market “as is.” Seek a strategic acquirer who could incorporate the product line into its own operation, leverage its own sales channels and achieve efficiencies by using its own manufacturing capacity.

The Employees:

How and when the employees were informed of the upcoming sale of the business.

The Outcome:

We took the opportunity proactively to market, and approached private equity groups and companies doing rollups in the fragment coatings industry. We found several interested enough to offer Letters of Intent. We met with owners, their accounting and legal team to evaluate the offers, and selected a buyer. After months of diligence, including a Quality of Earnings study, the deal closed. The proposed strategy became the final plan.

The Deal:

Owners received seven figure proceeds at closing, and have an upside opportunity for substantially more earnings by helping the buyer with strategy and sales, enabling them to profit as the product line grows.

About BTS:

Business Transition Strategies is a New England-based mergers and acquisitions firm advising owners of privately held companies 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.

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BTS News

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    Key Insights from Sale of Globe Manufacturing

    Excellent program Tuesday broke down details about the sale of Globe Manufacturing, a 4th generation family owned business based in New Hampshire.

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  • A Better Option to the Unsolicited Offer

    A Better Option to the Unsolicited Offer

    The call came out of the blue. It was a group interested in buying the business. They needed information. Your company was a perfect fit. Just send us some details and we will be in touch.

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  • M&A Advisor Tip - How to Answer Questions

    M&A Advisor Tip - How to Answer Questions

    As you start the sale process, you may be holding offsite meetings and fielding confidential phone calls. Even a subtle shift in activity can cause savvy employees to wonder, ‘What's up?’.

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  • What’s the Best Option for my Business?

    What’s the Best Option for my Business?

    Business owners have a wide variety of options open to them. A group of business owners joined us at our fall master class that focused on transition options and the experience.

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  • M&A Advisor Tip - When You Can't Fix Customer Concentration Issues

    M&A Advisor Tip - When You Can't Fix Customer Concentration Issues

    As a general rule, no one customer should account for more than 20-25% of your company revenue.

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  • Transition to Freedom explores business transition experiences

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    Hats off to MJ Schoer for sharing his fascinating multi-level business transition story to a well attended meeting jointly presented by Business Transition Strategies and mPower Advisors.

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  • Four buyers, three values, one winner

    Four buyers, three values, one winner

    Businesses we sell typically go to market without a preset asking price. Why? Value is really in the eye of the buyer. And that can vary widely, depending on who they are and what they have in mind.

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  • Strategies for growth or time to sell?

    Strategies for growth or time to sell?

    Has your business gotten to the point where it could grow but you’re not certain about taking the risk?

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  • Timing is Everything-Capitalize on Opportunies

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    Timing and value are both important An old proverb comes to mind this time of year. “Make hay while the sun shines.” Take advantage of clear weather. Capitalize on opportunities. Avoid the rain.

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  • M&A Trend Impacts Smaller Companies Too

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Case Studies

  • 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.

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  • 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.

    Read more >

  • 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?

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  • 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.

    Read more >