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."
NH-Based Techinical Manufacturing Company Sold
Hampshire Controls has a bright future with new ownership. The company was recently sold by Diane Rush, owner and president, to Pillar Imaging and its leader Dr. Michael Pilon.
Be Ready When You Are Ready
When a business owner says it’s time to sell, I ask, “How fast do you want to be out?” The answer I hear most is, “Yesterday.” But sellers underestimate how long the process takes.
Looking at a Sale Through the Right Lens
Sometimes our vision about the future is blurry because we aren’t considering the whole picture but only parts of it.
5 Deal Points from the Trenches
Today I work with clients of Business Transition Strategies who are implementing Growth Through Acquisition strategies. Here are a few observations from working on a wide variety of projects.
Tax Changes Could Hurt Net Proceeds
Changes proposed to the capital gains tax suggest they may need to get 30% more in a transaction in the future just to net the same value they would get today.
Good Ideas From Shark Tank Deal
One of my colleagues in Cornerstone Alliance was front and center in a recent Shark Tank exercise. A business that had been sold was put in front of four potential buyer groups.
Buyer Trends in Lower Mid-Market
Other businesses are a significant market for companies being sold within the lower mid-market.
Things to Consider in Transition Thinking
As a business owner, you have to consider the role you want to play in the business in the immediate future following a sale and how that could impact the sale.
Spring Cleaning is Good for Business
May is a good time for spring cleaning, especially at your business. It is a good time to look at your business as though you were in the throes of due diligence. Here are a few areas to consider.
Planning Ahead for a Sale
As you start thinking about selling your business, it is important to engage with someone who can coach you. There’s a lot of value you can create over the final years before you sell.
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.