Client Case Example #5
Profile
Privately held, third generation, $21M value-added, building products distribution business owned by three partners; two family, the third a close family friend that desired to exit the business.
Situation
The Owners literally grew up in the business, survived the economic downturn of 2009-11 and did not want to weather a storm like that again. Due to the fact that they had received several letters from large strategic players in their industry exploring their interest to sell their business, they attended a panel discussion at Packard Place regarding preparing your business for sale and one of the panel members was a CenterPoint CFO. After the presentation, they approached the CFO and asked to explore engaging our services.
Actions Taken
Our CFO engaged with the express objective of preparing the business for sale and managing the sale process from the CFO seat. This involved scrubbing the financial statements of the business for effective presentation, preparing a twelve month rolling forecast including P&L, Balance Sheet and Cash Flow Statement for presentation, preparing a due diligence package, working with the Partners to pull together an effective team of external advisors and coaching the Partners through the process. Since they already had demonstrated interest from multiple strategic players, the team did not include an investment banker. We successfully managed a competitive process ourselves and secured three LOIs. The degree of difficulty of this project was increased when we needed to replace their long-time Controller due to a voluntary departure during the process.
Results
Our CFO worked intimately with the Owners and deal team members in negotiating the terms of a transaction while we hosted an aggressive due diligence process over several months. Ultimately, the business was sold to a strategic buyer for an acceptable price with no earn-out provisions. Two of the Owners retired while one stayed on in a Sales capacity.