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."
Changes by owners helped a sale
Owners considering selling can look at the experience of a N.H. company for ideas of what to do to increase their chances for a good transition.
Advisor Tip: Don’t lose your focus
Don't let those future plans distract you from what's going on today.
Growth Methods Used by Buyers
We often hear from founders who feel they have hit the ceiling with what they can do with their companies. Buyer groups in the market see this as an opportunity.
Manufacturing Company Sale Named Deal of the Year
In November, BTS and IDI were presented the M&A Source Deal of the Year Award at the organization’s 2019 conference in San Antonio.
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.
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?’.
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.
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.
Transition to Freedom explores business transition experiences
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.
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.
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.