November 1, 2024
We recently completed the sale of a software engineering firm that had been operating for over 25 years. The business had three partners, each with different visions for the company’s future, and they felt it was time to make a transition. Before contacting Woodbridge, the owners hired another investment banking group that wasn’t able to generate any interest in the business. After reviewing their business, financials, and our value-driven process, they were ready to proceed. At the end of the deal, we also referred all three owners to an experienced wealth advisor.
After preparing all the materials and confidentially sending them to strategic and financial buyers, we received 7 bids for the business. Our team then vetted these buyers to evaluate their strategic fit, likelihood of closing, and sources of funding. We set up management meetings with the 4 top buyers. Earlier in the process, Woodbridge facilitated a one-day management meeting workshop that got the owner to think like a buyer — it was like they were on Shark Tank! We know how buyers will challenge our clients and what they are looking to hear, so time is optimized, and we can make the best impression.
That is exactly what happened — from those 4 meetings, we received 4 letters of intent. Since we received all the letters of intent at once, our client had leverage, putting us in a better position to negotiate. The highest-quality prospective buyer was initially a few million dollars below the top offer; however, due to the competitive auction Woodbridge created, they increased their offer by 25% and became the ultimate buyer! The owners signed under exclusivity with a $300 million family office that had a strategic company in their portfolio where our client was seen as the perfect fit.
Most deals fall through due to material differences between a company’s actual results vs projections, and unfortunately, our client’s business slipped dramatically during due diligence. The buyer had every opportunity to renegotiate the deal because of this, but didn’t — why? The buyer saw our client as a “must-have” acquisition. They weren’t focused on the 2024 results; rather, they were focused on the future growth of the business. Besides the performance slip, a few other items came up during due diligence, but our team did an excellent job of finding the right solutions to ensure the deal closed on time.
In total, this deal took 1 year to complete, and we were able to exceed our client’s expectations. Ideally, the best time to sell your company is when it’s doing well, but sometimes you don’t have the option to wait. With the right approach, even in challenging circumstances, a successful outcome is achievable — and this deal is a testament to that.