April 4, 2024
We recently facilitated the sale of a specialty glass manufacturer. A few years prior to contacting Woodbridge, the company was not profitable, had issues with their lenders, and needed outside help. The owner, a scientist whose focus was mostly on the patented products he was creating, wisely hired a business consultant. Within 2 years of working with the consultant, the business was trending well, had repeat customers, products, backlog, and a credible future story. The business was now at the point where the proceeds from a potential sale would meet the owner’s objectives, and he and his wife wanted to move on to other things.
With the consultant’s input, the company hired us to market the company. The business obtained strong interest, attracting 153 buyers, of whom 19 submitted bids to acquire the company. Our closing team then vetted these buyers to understand their strategic angle, how they were going to fund the deal, and their likelihood of closing. We set up management meetings with the 3 best buyers who were of the highest quality, and this was done to help narrow the focus of our client as they received strong interest.
Our client ended up going with a strategic buyer backed by a private equity group. From the launch of the marketing campaign until the letter of intent was signed, it took 49 days. During the due diligence process, one of the main issues was the patents the client owned outside of the business. The buyer wanted the patents, so our team worked with theirs to help value these and include them in the deal.
The second issue that came up in the deal was with one of the minority shareholders. When we represent a company, we are representing all shareholders, and the goal is to get the best outcomes for all parties. This minority partner and his family were not active with the business, but they were looking for a larger financial gain as the proceeds would go toward the next generation’s trust. We stayed focused on the big picture, presented some alternative solutions, and brokered a deal that made all parties happy with the outcome.
Every due diligence is different, and in all cases, there are hurdles that need to be overcome. Due to our role in the deal, and the fact that we had a robust process and obtained backup buyers, we can have difficult conversations when needed, while also being able to negotiate better and get the best terms and outcomes for our clients.