| Organization: Manufacturer of equipment for construction and related industries. | Need: Professional guidance to help navigate the complexities of selling a business. | Outcome: Owners received double the price of the initial offer for the sale of their company. |
Understanding the situation
Over the years, two owners of a Minnesota-based manufacturer of equipment for the construction and related industries successfully grew their business — and ultimately reached a point where they ran out of space.
As they debated what to do next, a professional connection indicated interest in buying their company. As successful entrepreneurs, their first inclination was to explore this opportunity on their own.
Before you sell, explore the potential value of your business.
CLA had supported the client with various services for many years. Aware of the direction the owners were considering, CLA proactively introduced the firm’s investment banking team and encouraged the owners to explore a second opinion. Through modeling, the owners saw the potential well beyond the first offer.
Exploring the challenge
The owners agreed engaging a professional team to help navigate the complexities of a sale made more sense than going it alone. Due to our long history and working knowledge of their business, CLA’s investment banking team was a natural fit for exploring pathways to higher upside and mitigating risks.
CLA brought the same high level of innovation and quality to the sale process as the client brings to their own customers.
The first step involved educating the owners on the process of selling the company. The CLA team members shared their deep experience of the world of mergers and acquisitions from both a buyer’s and seller’s perspective, rather than simply telling the owners what they should do.
The owners had lots of questions about tax exposure, and CLA modeled various deal structures. They also created a sell-side quality of earnings workbook to help the owners get a feel for the company’s valuation and areas to improve attractiveness of the business.
The company was then marketed to strategic, quasi-strategic, and a variety of financial buyers with aligned interests. The entire process took about a year.
Achieving results
By leveraging CLA’s investment banking team instead of attempting the transaction process on their own, the owners received 27 offers in addition to the initial offer. With that competitive process, the owners received double the amount of the initial offer.
The outcome not only provided financial security for the owners and their families but enabled them to be extremely generous with their team, as well as launch mission-based and community impact initiatives.
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