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.
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.
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.
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.
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.
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.
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.
"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.