July 4, 2024
We recently facilitated the sale of a wholesaler & distributor of outdoor supplies. The business has been around for over 100 years and successfully transitioned from generation to generation. However, there was no one next in line interested in continuing the family legacy, and the owner expressed a desire to exit the business soon due to health issues. This opportunity also came through a financial advisor who did a great job convincing the owner to speak with other firms, as they were initially set on one referred by a friend. Our process resonated the most with the owner out of all the other firms, and we were off to the races. After sending out our teaser to strategic and financial buyers, we received seven total bids. The top strategic buyer had previously expressed interest in acquiring the company; however, the timing was not right in the past. We informed them that they would need to submit a strong offer to persuade our client to consider preemptively signing a Letter of Intent before conducting management meetings with other qualified groups. Ultimately, we hosted one other management meeting before the strategic buyer submitted a 6.97x multiple that came in as all cash. While out in the market, the owner informed us that a key salesperson had left the business and had taken customers. A few weeks later, the owner brought him back to the company, along with the future sales he had taken. We were able to minimize the impact of this issue during the deal by bringing it to light with the ultimate buyer.
Due diligence moved swiftly from the start, and weekly all-hands calls brought achievable milestones with each passing week. With efficient work being done by our client and our timeline running ahead of schedule, we agreed to move the closing date forward. It was clear that the buyer viewed our client as a key acquisition to maintain market dominance in the upper Midwest, and we were able to collaboratively drive efficient solutions to any roadblocks that could have caused a delay. From start to finish, this took our team 182 days to complete, and we were able to exceed our client’s expectations. Of the 13 companies we’ve sold this year, 85% have gone to strategic buyers and 77% of our clients didn’t know the ultimate buyer prior to transacting – in all of the transactions, we exceeded or met our clients’ value expectations. This year, we have closed 63% more deals compared to the same time last year, and we currently have 17 more deals under Letter of Intent that are set to close over the next three months.
Right now, we are experiencing a strong seller’s market. That being said, the best time to sell your company is when it’s doing well and you don’t have to sell. Here at Woodbridge, we are always happy to learn your story and understand your company so we can convey realistic value ranges as well as what timing makes the most sense.