Banner

< Return to Case Studies

Water Purification Company and Young Buyers

Our client company is a processor and distributor of ultra-pure water systems for medical and manufacturing concerns.  It works with major institutions and research facilities in the Boston area, and caters to the needs of technology and manufacturing facilities along the I-95 corridor and across New England. It enjoys repeat business and is effective in serving customer needs.

Production and Processes:

The company designs, builds and installs systems. It also provides the consumable components and ongoing service to maintain ultra-pure water. Customers include dialysis treatment centers, research facilities and manufacturing sites – commercial clients who need the services. The business made this its niche, staying clear of the home market.

Possibilities and Concerns:

The owners invited us to help with an exit strategy. The company had grown remarkably during its three-plus decades. Staff members are authorities in the field, and do their jobs without much direction from management. A media replenishing plant, custom built on the site, remains in excellent shape and is an integral to the operation.

Choices, Choices:

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 (owned by a related entity) remain in use? Recurring revenues and healthy profits made the company attractive.  There was a catch, though. Its rural location put it miles from urban areas. The crew was like family, and a sale to a strategic player – who would pay the highest multiple of EBITDA - might require a shutdown of the facility. The experienced staff might have to relocate or lose their jobs.

The Plan:

After a thorough research of the market and exploration of potential buyers, the company was taken to market. Owners received an offer from a strategic group, with a very good price attached, but as feared with the provision that the company would have to be moved. Among the other bidders was a newly-formed search fund. Coordinated by two recent MBA grads from Harvard, the group submitted a proposal satisfactory to owners. And additionally, the principals planned to actively run the company and wanted to live in a rural area.

The Outcome:

We facilitated a thorough diligence process with records provided via our data room. This enabled the owner to stay focused on business. One concern was ability to finance the deal. But since there were limited partners, with substantial resources available, it was not a problem. Several banks competed for the transaction.

The Deal:

Owners received a satisfactory price. They provided transition training and assistance. The buyer group leased the facility for years into the future, an added benefit to owners. The staff was retained and new jobs created. Interestingly, after operating the business for a while, the fund owners purchased a second company in a similar business and are on track for long term growth.

 

 

< Return to Case Studies

BTS News

  • Manufacturer Sold and New Owner Expands It

    Manufacturer Sold and New Owner Expands It

    BTS served as advisor in the sale of PlasTech Machining Fabrication, Inc. to DelCam Holdings in 2020...the company has grown substantially, doubling employment and adding capacity to boost future prod

    Read more >

  • How M&A Will Respond to Next Recession

    How M&A Will Respond to Next Recession

    The takeaway for business owners: Get back to basics. Don’t worry about hyper growth. De-risk your company as much as possible.

    Read more >

  • Perception vs Reality with Small Businesses

    Perception vs Reality with Small Businesses

    Sometimes the economic picture on the news seems inconsistent with what is happening for many business owners. Nearly every owner we speak to is out straight.

    Read more >

  • NH-Based Techinical Manufacturing Company Sold

    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.

    Read more >

  • Be Ready When You Are Ready

    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.

    Read more >

  • Looking at a Sale Through the Right Lens

    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.

    Read more >

  • 5 Deal Points from the Trenches

    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.

    Read more >

  • Tax Changes Could Hurt Net Proceeds

    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.

    Read more >

  • Good Ideas From Shark Tank Deal

    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.

    Read more >

  • Buyer Trends in Lower Mid-Market

    Buyer Trends in Lower Mid-Market

    Other businesses are a significant market for companies being sold within the lower mid-market.

    Read more >

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.

    Read more >

  • 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?

    Read more >

  • 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 >