Selling an Immature Company for Maximum Value Quickly

The Challenge

This building products distribution company was less than five years old. However, the partners felt that they had grown this start-up operation as far as their personal resources and energy could take it. If they could obtain a reasonably strong price in the marketplace, they were ready to hand it off to a next generation of ownership. This distribution company had experienced strong growth trends and strong performance (earnings) considering its short history. It was perfectly positioned in growth markets and an attractive location for living.
Selling an Immature Company for Maximum Value Quickly

The AdvantEdge Solution

We engaged with the client to put the best face on the business and to deploy our proven marketing processes. A relatively inexperienced, but motivated Midwest buyer emerged from our networks within weeks of launching the offering in the market. As intermediary, we assisted the buyer in overcoming several obstacles, including a strong fear of the risks involved, and helped him to successfully securing financing.

The Results

The sellers received a high multiple of earnings for their industry which was clearly top-dollar for the size and type of business. The terms included all cash at closing. One partner was able to address mounting health concerns and pursue other less-demanding business interests and the other received sale proceeds to diversify his investment portfolios and yet remained in a long-term employment relationship with the buyer. The business was sold and the owners were off the firing line within three months of going to market. A few years later, the buyer was enjoying record sales and had already moved into an expanded facility.


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