April 1, 2025
One of our recent transactions involved a service business that sold for over $100 million. Founded more than 25 years ago by two family friends, the company experienced remarkable growth. One owner was in their early 60s,
and the other in their mid-50s. Both owners were looking to step back, but the younger owner still had some gas in the tank and saw significant potential with the right buyer.
Once the marketing materials were finalized, we sent out the teaser to both strategic and financial buyers. The teaser provided a high-level overview of the business to pique interest without revealing its identity. After a buyer is approved by the seller and signs a confidentiality agreement, they receive the full offering memorandum, which includes a detailed business overview, supporting exhibits, and the future growth story. Typically, we remain in the market for 21 days, aiming to gather all bids at once, providing our client with options and leverage. However, this process took a slightly different turn.
Although we initially expected 30-35 bids, a $35 billion publicly traded company emerged early with a compelling offer. Recognizing the competitive process and viewing our client as a must-have, we successfully negotiated a significantly stronger letter of intent, far exceeding expectations. From the start, we align with clients on realistic value. While we originally projected a 7x EBITDA multiple, a business is ultimately worth only what a buyer is willing to pay, and you never know for sure until the market speaks. Thanks to the competitive process and our strategic negotiations, we secured a 12x EBITDA multiple – well beyond our initial projection! Given the buyer’s profile, existing relationship with our client, and the strength of their LOI, we decided to proceed under exclusivity.
Due diligence is often the most challenging part of the process, but this is where our client truly turned a corner. Initially, the owners were more focused on business operations than the sale process, which can delay deal timelines. However, after some coaching and their growing excitement about the LOI, they became much more responsive, addressing all data requests promptly, which helped keep the deal moving. The buyer, having completed over 50 acquisitions, was thorough and eager to dive deeply into confirmatory due diligence. Understanding the balance between what is fair and reasonable versus over-analysis, we stayed on top of the process to prevent unnecessary delays.
With no material findings and our client’s strong financial performance, due diligence proceeded smoothly. The entire timeline from engagement to closing took approximately 11 months, and our clients were highly satisfied. For most business owners, the majority of their net worth is tied to their business, and because of that, they may not be working with a wealth advisor capable of handling the level of liquidity we help generate for them. In this case, it was no different, and they were interested in seeking a second opinion from a strong wealth advisor. So far this year, we have closed 10 deals, compared to 3 deals during the same period last year. Volume is up, and our backlog is strong. We also serve as a reliable barometer of the overall economy, handling companies across a variety of industries throughout North America – and the majority of our clients continue to perform well. Given these favorable conditions, now is an excellent time for business owners to explore their options and leverage the competitive market to maximize value.