August 1, 2024
We recently facilitated the sale of a $17 million company. The husband-and-wife team acquired the company 40 years ago and grew it to a respectable level. However, with no next generation interested in taking over the family business and some health issues, the owners decided it was time to sell. Throughout the entire engagement, the owners’ daughter was the main contact. After speaking to a few M&A firms, they ultimately felt confident in the Woodbridge process!
During every kickoff meeting after a client hires us, we ask if they are working with a wealth manager and an M&A attorney. We have found that clients who go through this process with the most clarity are those who are working with an experienced wealth manager and feel confident that the advisor can handle the post-transaction liquidity. About 50% of the time, the business owner requests a referral, and in this case, it was no different. After making a few introductions, the owners made their selection, and once the transaction was completed, that new advisor began managing high seven figures from the sale.
After preparing all the materials and sending out our teaser to strategic and financial buyers, we received 21 bids. Our closing team vetted all the buyers to understand their strategic angle, access to funds, and likelihood of closing. We felt it made sense for the owners to speak to the top six buyers while keeping the rest warm in the meantime. After conducting the management meetings, we received four letters of intent, and the top strategic buyer was the clear choice. Even though the owners had a better financial offer from another buyer, they felt the ultimate buyer met their financial needs and would put their company in the best position to move forward.
One of the major negotiating points prior to signing the letter of intent was the real estate, which was the stickiest point in the deal for the owners. After getting the owners comfortable with being landlords, we moved on to due diligence. This company had some significant nuances in the inventory valuations. Our team did a great job working through this with the buyer and getting them comfortable with the ebbs and flows. Another issue was the working capital, but again, our team worked with the buyer to find a fair solution that benefited our client. Of course, a significant driver here was the strength and experience of the buyer—a $4 billion+ strategic buyer isn’t going to quibble over minutiae when they’re motivated to close.
From the time the client engaged us until we closed was 8 months. The successful sale not only exceeded their financial goals but also ensured a smooth transition for the future of their business. This serves as a prime example of how we explore the global buyer universe so our client can be assured they were exposed to the best deal in the market and closed with a buyer that made the most sense for them. We are proud to have supported them in this significant chapter and look forward to continuing to deliver exceptional results for our clients.