Industries Served

We Are Industry Agnostic

Commercial

Construction

Distribution

Educational

Healthcare

Information

Logistics

Manufacturing

Residential

Technology

Transportation

Warehousing

Commercial Services

Time on Market: 3 months

Client Objective: “Sell my company and retire.”

Discovery Meeting: The owner started this company 20 years ago after immigrating to the US from Brazil. The company had a great reputation, loyal clients, steady revenue, and consistent year-over-year growth. The owner asked, “How much is my business worth and how long is the transition process?” We provided our opinion of value and explained that transition times typically vary between one and twelve months depending on the buyer so having flexibility helps. When asked about any company issues, the owner mentioned that several years ago he caught an employee embezzling from the company. He stated that the employee was prosecuted and found guilty so that issue had been resolved.

Assessment: The company had clean financials, low overhead, strong consistent cash flow, and could be optimized and scaled.

Deal Process: We quickly identified and qualified a financial buyer and enticed a full-price offer. This buyer wanted to leverage the operational experience he had gained over the years in the corporate world and purchase a business in Dallas, Texas with an SBA loan.

Major Challenge: About a week prior to closing, the bank’s legal department discovered a pending lawsuit that had been filed against the company. Our client said he never thought to mention this because he thought it was frivolous and had been settled. The bank would not fund us until we provided documentation proving the case had been settled.

Solution: We contacted our client’s insurance company and were told the case was open so they could not provide any information. We requested contact information for their law firm and spoke with the attorney handling the case. We were told that the settlement amount had been agreed to, however, the funds had not been released so they could not provide any documentation. After some discussion, the attorney came up with one possible solution which was to ask the plaintiff to give written consent. We asked the attorney to contact the plaintiff.

Result: Closed transaction at the high end of market value.

Conclusion: It is extremely advantageous to have an experienced Mergers & Acquisitions advisory firm on your side when it’s time to sell your company. It is also extremely important to disclose any past, present, or potential litigation with them prior to going to market.

Construction

Time on Market: 30 months

Client Objective: “Should I sell my company now or continue growing and sell later?”

Discovery Meeting: The owner started this business eight years prior. The company had a great reputation, year-over-year growth, and revenues in the mid 20MM range. Over the years a service division developed, however, the owner did not focus on this aspect of the business even though the profit margins were much higher than the construction division.

Assessment: Construction revenue is project-based and this type of business can be difficult to transition to new ownership due to the seller’s personal relationships in the industry. The buying power of this company was excellent because of the volume of equipment purchased. If pursued, the construction side had the potential to supply approximately 2,500 new service customers per year. 

Deal Process: We identified a Private Equity Group that was interested in acquiring a platform company in this industry, however, they were more interested in the service side due to the higher profit margins. We explained that the benefit of making this company their platform is that their vendor pricing is approximately 44% lower than service only companies. That meant they would realize 44% more profit for every dollar spent on equipment by any future service companies they acquire. Additionally, the construction side could automatically supply thousands of new service customers annually.

Major Challenge: The large portion of low margin construction revenue resulted in a low overall percentage of EBITDA compared to total revenue. For this reason, the Private Equity Group’s conventional lender would not approve the transaction. This buyer found a mezzanine lender that would fund the transaction; however, they required equity and had an extremely high interest rate making the terms unfeasible. 

Solution: We advised our client to shift gears and consider buying a service company as that would be the quickest way to increase the overall revenue mix and net profit margins. We targeted an ideal service company that if acquired would more than double the size of the service division. We reached an agreement and were able to close the transaction within 45 days. Twelve months later the integration was complete. Prior to going back to market, we reached out to the Private Equity Group that previously had interest. Due to the increased EBITDA, revenue mix, and profit margins, the buyer was able to get acceptable financing terms and we were able to secure a better purchase price for our client.

Result: Closed transaction at the high end of market value. 

Conclusion: An experienced M&A advisory firm can help you develop and implement strategies that will increase the profitability and purchase price of your business. 

Distribution

Time on Market: 14 months

Client Objective: “What is my company worth and how do I create an exit strategy?”

Discovery Meeting: The owner started this company 15 years ago and was becoming burned out. When asked about this, he stated that he was making good money and didn’t think the company would sell for enough to maintain the lifestyle he and his family were accustomed to. After learning about the company and reviewing the financials we provided our opinion of value which was about a million dollars less than the owner had been thinking it would take for him to sell the company.

Assessment: The company had clean financials, an average year-over-year growth of 14%, and was very scalable. We knew the target price for the company would be challenging. Due to the quality of the company, we suggested performing a 90-day market test. If entice an acceptable offer the owner could sell now and if not, we could help him develop an exit strategy.

Deal Process: We immediately had interest from buyers and as expected they were coming in under the target purchase price. As is usual, we had developed a strong trust relationship with our clients and after 90 days we mutually agreed to pause the engagement. Several months later we came across a large strategic buyer that wanted to acquire exactly this size and type of business. They had an aggressive growth strategy and had just missed out on a similar acquisition. This buyer was extremely impressed with our client’s abilities. We were able to negotiate an acceptable price if our client would retain 15% equity and agree to manage this division for their platform company.

Major Challenge: Although the purchase price worked for our client, he did not want to continue in the business. The purchase price was contingent on the owner staying and managing this division of their company.

Solution: We listened to our client and discovered that he was still passionate about the business. He had simply grown tired of some of his more mundane responsibilities. We explained to the buyer that if our client could delegate certain responsibilities, he would be able to focus on management and growth.

Result: Closed transaction for 37% over market value. Additionally, we were able to negotiate that after achieving certain milestones our client would be able to transition into an advisory role.

Conclusion: We listen to our clients and leverage our experience to help them maximize their exit.

Educational

Time on Market: 10 months

Client Objective: “Is my company sellable?”

Discovery Meeting: The owner started this company 45 years ago and the business had consistent historical revenue. In the previous year, the owner and his wife had some health issues that caused the revenue of the business to decline drastically. The owner was ready to retire and stated, “I knew I should have sold the company a couple of years ago.” He and his wife were concerned that was no longer an option.

Assessment: Due to the age, customer database, reputation, and scalability of the business, we knew that if we found the right strategic buyer, we could showcase the decades of consistent cashflow and explain the legitimate reason it had declined in the previous year.

Deal Process: We received multiple offers from both strategic and financial buyers all around the same price range which was in line with a standard multiple of EBITDA valuation.

Major Challenge: Very little serious interest at the target purchase price and low offers due to the recent decrease in cashflow.

Solution: We targeted a large local strategic buyer that we knew would be able to leverage this company’s reputation and customer database to increase their own revenue and cashflow. This buyer had a large outbound call center with the technology to track both incoming and outgoing phone calls and any resulting revenue. We met with this buyer and went over the synergistic value this acquisition would provide as they could eliminate the lease, the owner’s salary, software expense, and other overhead costs. We proposed a structure that consisted of cash at close equivalent to the previous offers we had received and a minimum and maximum earnout based on sales resulting from mining the customer database.

Result: Closed transaction for approximately three times market value.

Conclusion: Despite a drastic decline in revenue, ATK Ventures was able to leverage the company’s assets and historical cash flow to structure a mutually beneficial M&A transaction.

Healthcare

Time on Market: 12 months

Client Objective: “Should I use an M&A advisory firm that specializes in my industry?”

Discovery Meeting: The owner had built an incredible business with revenues in the mid 30MM range. He knew selling for the price he wanted would be a difficult task, so he was interviewing M&A firms that specialize in their industry. They had met with four other firms and had not yet found “the right fit.” They asked if we had ever sold a company like theirs. We replied that we had not and explained that we are industry agnostic because our unique process is effective with any type of company. The owner stated that he was now confident he had found the right firm and engaged ATK Ventures to sell his company.

Assessment: We knew this would be a challenge, however, this was a great business with a lot of synergistic value and scalability for the right strategic buyer.

Sales Process: We targeted various buyers and explained that this was a niche business and that we were looking for a very specific type of acquirer. We enticed two offers within the market value range. Our client decided to decline rather than have us counter as both offers were well under the target purchase price.

Major Challenge: Several months later our client called an emergency meeting and stated that due to recent changes to Medicare reimbursements, they were now losing six figures per month. He explained that if the business was not sold within four months, the business would go bankrupt. Our client said he would now accept any reasonable offer.

Solution: We identified our client’s largest competitor and reached out to see if they would have interest in a strategic acquisition that would double their size. The owner of that company was interested and flew in to meet. We enticed an offer that was around the same as the two previous offers we had received. We reasoned with this buyer that a typical market valuation was not applicable due to the synergistic value this acquisition would provide. We knew this strategic buyer would realize substantially more profit, with essentially no additional costs, therefore, our clients would not sell unless the price was right. Realizing this was true, the buyer increased their offer by an incredible 67%, which was in line with the original target price.

Result: Closed transaction for an incredible 67% over market value.

Conclusion: The “market value” of a company can be significantly lower than the “synergistic value.” Several years later this has proven to be a win/win transaction. This single transaction almost doubled the cashflow of the buyer’s business and accomplished our client’s exit goals.

Information

Time on Market: 13 months

Client Objective: Owner 1: “Sell my company so I can retire and play golf.” Owner 2: “Sell my company so I can travel with my family and then start another venture.”

Discovery Meeting: The two partners started this business in 2013. Both had recently had some health issues and decided it was time to consider selling the company. The older partner was ready to retire, and the younger partner wanted to start another company. They had been approached by a strategic buyer that made an offer with a very attractive purchase price, however, it was 100% seller note so they declined. We provided our opinion of value and were informed that it was significantly less than the offer they had received. We explained that the value of a company varies greatly depending on the buyer and that very likely the offer they had received was inflated to make up for the fact that it was 100% seller note. The owners had been referred to us, so we suggested performing a 90-day market test and then reevaluating.

Assessment: The business had customers in 26 states that were companies with 5 to 500 employees with seemingly very little customer concentration. The company had year over year growth with 96% of revenue being monthly recurring on a 3-year contract. Additionally, the company was extremely scalable and had a 3% customer attrition rate which is excellent. The only challenge we saw initially was the target purchase price.

Deal Process: We targeted over 100 potential strategic buyers and filtered those down to the top five. We enticed offers from all five buyers and they all came in very close to our opinion of value. We countered and after several negotiations, two buyers increased their offers significantly. We advised our clients to select the offer with the most cash at close.

Major Challenge: The buyer hired KPMG to perform their due diligence. We were preparing to enter the legal phase when the buyer reached out with some bad news. KPMG had discovered that the company had 40% customer concentration because one customer owned several other companies that were also customers. The risk of losing this customer caused the buyer concern and they wanted to renegotiate the purchase price. We spoke with our clients, and they became extremely upset with the buyer and said they would not agree to a reduction. They said they had never been concerned about losing that client. We asked them why and they told us.

Solution: We explained to the buyer that this large customer had proven to be very loyal over the last 9 years because the services they provide them helped them become more efficient which allowed them to grow rapidly. This customer now acquires several companies a year, so they are always adding new locations and increasing their monthly spend. This meant it would be difficult and expensive to switch all their locations to a competitor, not to mention the fact that they were a very happy customer.

Result: Closed transaction for 39% over market value.

Conclusion: At ATK Ventures, we listen to you as our client and leverage our experience to help Maximize Your Exit!

Logistics

Time on Market: 2 months

Client Objective: “How much will I be taxed when I sell my company?”

Discovery Meeting: The owners were a married couple that decided it was time to sell their company and spend time on land they owned out of state. The business was 35 years old with consistent revenues, a loyal customer base, and tenured employees. The business was a C Corp., and the owners had heard that they would be taxed twice if they sell the company. We explained that when a C Corp. is sold, the enterprise is taxed and then any proceeds taken by the owners are taxed so, in simple terms, they are taxed twice. We said that we never give tax advice, however, our trusted advisors are experts in that field and have helped many of our clients drastically reduce their overall effective tax rate.

Assessment: Due to the age, reputation, profitability, scalability, and quality of the company financials we knew this company would be attractive on the market.

Deal Process: We received a call from our clients stating that they had been contacted by a buyer they had met with several times prior to hiring our firm. Our clients were never able to reach an agreement with this buyer, so they asked us to give him a call. During our conversation with this buyer, we learned that he owned a large company and had made over 20 acquisitions. He stated he did not need to perform the typical due diligence and could close quickly because of his knowledge and success acquiring these types of companies. We shared what we believed the company’s synergistic value would be to the right strategic buyer. After a few discussions, we were able to come to an agreement on purchase price and structure.

Major Challenge: This buyer stated he wanted to close within one week and would have his attorney draw up the legal documents. We knew from previous experience it would take a minimum of three weeks for our trusted advisor to “spin out” our clients personal goodwill from the C Corp. We knew that would have to be completed prior to closing as unlike a typical transaction there would need to be two purchase agreements, one for the enterprise and another for the personal goodwill. Having never heard of this, the buyer stated that if our clients wanted this deal, we would need to figure out how to close within two weeks.

Solution: We explained the tax implications for our clients. We also expressed that we would have the goodwill spin out and legal documents completed in tandem and having the seller’s attorney draw up the purchase agreements would reduce buy-side legal fees. We assured the buyer we would do everything possible to expedite the process and close within three weeks. After understanding the amount of savings this meant to our clients with no impact to him, he agreed to our closing timeline.

Result: Closed transaction at the high end of market value.

Conclusion: ATK Ventures has relationships with many vetted trusted advisors that are experts in their respective fields. We leverage those relationships to help protect our clients and optimize every aspect of their exit.

Manufacturing

Time on Market: 3 months

Client Objective: “Will my employees be taken care of if I sell my company?”

Discovery Meeting: This business was started by a married couple over four decades ago. Their son had recently taken over operations and the owners were concerned about his and other employees’ job security if they sold the company. We explained that our experience is that smart buyers value the employees of the companies they acquire. We always advise buyers to make minimal changes during the first twelve months after acquiring a company. Our experience is that many times employees receive an increase in compensation or a retention bonus and almost always have even better job security and opportunity for advancement within the company as it grows.

Assessment: This company had a good reputation, a loyal customer base, clean financials, and was very scalable.

Deal Process: We prepared the CIM (Confidential Information Memorandum) and put the business on the market. We had just sold a similar company to an out-of-state buyer and knew he was in acquisition mode. This buyer flew in to meet and instantly connected with our clients. Soon after we negotiated an excellent purchase price and structure.

Major Challenge: On the day of closing, our clients told us that their son had just told them that he always envisioned taking over the company. He was not happy that they were selling the company and was considering leaving and starting his own company. This would likely cause the buyer to want to reduce the purchase price or backout all together.

Solution: We knew we needed to negotiate a compensation plan that would work for the son and the buyer. The buyer knew the son was running the company and considered him to be a great asset. We knew this buyer would need an operations manager for the other company we had recently sold him once that owner transitioned out. We knew that would free up that owner’s salary. We believed the son had the ability to manage both companies due to their proximity. The buyer was receptive to this idea as this would not affect the cashflow and would save him having to interview and hire an experienced manager. We were able to negotiate an acceptable compensation package and the seller’s attorney revised the employment agreement at the closing table.

Result: Closed transaction for 27% over market value.

Conclusion: It’s wise to maintain confidentiality when you are selling your company for many obvious reasons. Although this is true, some owners feel compelled to let certain key employees know about a pending sale prior to closing. An experienced M&A advisor can help you make an informed decision as to when and how to have those conversations.

Residential Services

Time on Market: 5 months

Client Objective: “Sell my business so I can spend time with my family.”

Discovery Meeting: Soon after starting the company, the owner and his wife started their family and had two sons within a short period of time. The company was growing fast, and the wife soon started working full-time in the company. By the time the boys were preteens, the owners realized they had spent more time running the business than with them. After much consideration, they decided selling their company was the best thing for their family. They were not sure what they would do for a living once their sons were grown in a few years. We advised they would probably have a non-compete agreement. They could make up time with their sons during that period and then start another business if they wanted to.

Assessment: Due to the year-over-year growth, zero debt, tenure of the employees, scalability, and reputation of the business, we knew the company would demand a premium and were engaged to sell the business.

Sales Process: We identified a financial buyer that had just lost out on buying a similar company because the seller backed out prior to closing. This buyer had a transferrable skill set from his time in the corporate world and he was more than ready to buy a business and become an entrepreneur. We quickly enticed a full-price offer and negotiated an excellent structure. We reviewed with our clients and executed the LOI (Letter of Intent).

Major Challenge: The seller had the only operating license for the business. The buyer did not have an operating license. The business and the buyer easily qualified for an SBA loan with one very important exception, it takes four years of field experience to get the necessary licensing. We could only use the current owner’s license for a period of 12 months per SBA regulations. We discussed with bank after bank and after about 6 banks rejecting the deal, we finally found one out of state that said if we could come up with a reasonable solution, they would approve the loan.

Solution: We researched and found that with a mechanical engineering degree, only two years of field experience was needed to get licensed. We knew that if a full-time employee was licensed, the business could operate legally in Texas. We confirmed that two tenured employees had the experience and ability to pass the licensing test. Our solution was for the two employees to each get their license post-close. The new owner agreed he would pay them both a quarterly bonus for the right to lease their licenses for a minimum of two years. That redundancy, combined with having the seller’s license for the first year, covered the two-year gap and was acceptable to the bank.

Result: Closed transaction on the high end of market value.

Summary: It’s hard to place a monetary value on time and selling a business is a highly emotional experience. That said, once the decision has been made, it’s extremely important to partner with an experienced M&A firm that can help overcome obstacles and maximize your exit.

Technology

Time on Market: 4 months

Client Objective: “Sell my company and invest in another business venture.”

Discovery Meeting: The owner had previously hired a business broker that was not able to introduce any qualified buyers. Once that listing agreement expired, the owner decided to try and sell his company on his own. He was eventually introduced to a potential buyer and negotiated an acceptable price for the purchase of his company. This buyer took an excessive amount of time in due diligence, so after much frustration, the owner eventually decided this buyer was not capable of closing. The owner realized he had wasted a lot of time which had caused the business to suffer. He needed to sell his business fast as the window was closing on an opportunity to invest in another venture.

Assessment: After listening to the owner’s story and reviewing company financials, we were confident we could help and were engaged to sell the business.

Sales Process: We quickly identified and qualified a financial buyer and facilitated a meeting with our client. The meeting went extremely well and the buyer submitted a full-price offer. We reviewed the offer with our client and executed the LOI (Letter of Intent).

Major Challenge: Two weeks before the scheduled closing, the client called in a panic stating that when he had previously tried to sell the company on his own, he had signed an LOI (Letter of Intent) with a buyer. That buyer somehow found out he was selling his business and threatened legal action. As is typical, there was a clause in the LOI stating the seller could not market the company to other buyers prior to its expiration or he would be liable for any buyside expenses incurred prior to closing.

Solution: We knew we were about to close the transaction. We advised our client to meet with the previous buyer and settle for a reasonable dollar amount in exchange for a signed release from the LOI. We advised our client on how much to offer the previous buyer agreed to the settlement and released our client from their agreement.

Result: Closed transaction for 29% over market value. Our client was able to invest in the new venture.

Conclusion: Selling your business without an experienced M&A advisor is like representing yourself in court without an attorney. An experienced intermediary can remove emotions from the negotiating process and help maximize your purchase price and net proceeds.

Transportation

Time on Market: 9 months

Client Objective: “Should I sell my company or hire someone to replace me?”

Discovery Meeting: The owner started his business 30 years ago and it quickly started cash flowing. Over the years he invested in various real estate properties including one that had a pecan orchard. The owner had always worked in the business full time. Three years prior, he hired someone to take over many of his responsibilities and was now only working about 15 hours a week. The owner wanted to sell the company if he could get the right price. If not, he would just hire someone else and become fully absentee. His reason was so he would have more time to focus on his pecan orchard and real estate investing.

Assessment: This was a quality business with a great reputation and consistent historical cashflow, however, it was in a small rural town and the owner wanted a premium. We advised the owner that this would be a challenge and if we were not able to entice an acceptable offer we would pause or cancel the engagement and focus on an exit strategy.

Deal Process: We targeted a strategic buyer in the area and although he had an interest in the business and the associated real estate, he thought the price was too high for that area. We knew this would be a good fit due to the proximity to this buyer’s other locations, so we facilitated a meeting with our client. The meeting went extremely well and soon we were able to agree on an acceptable purchase price. We created a structure that provided enough cash at close to make our client happy and a seller note with terms that worked for the buyer.

Major Challenge: The global pandemic Covid 19 hit and the buyer decided to postpone the closing to see how this would affect business. Soon after, the price of oil plummeted. This buyer was heavily invested in oil and gas and decided to put the acquisition on indefinite hold.

Solution: There was simply not much we could do in this case other than maintain relationships and communication with our client and the buyer throughout this very difficult time. As the months passed the company proved to be an “essential business” and eventually, oil and gas prices started rebounding.

Result: Closed transaction for 34% over market value.

Conclusion: Marketplace conditions and timing are critical elements to consider when selling your business. While no one has a crystal ball, ATK Ventures will help you make informed decisions and complete a successful transaction.

Warehousing

Time on Market: 4 months

Client Objective: “Sell my company so I can go on more fishing expeditions!”

Discovery Meeting: The owner started this business 15 years ago and built it in hopes that his son would someday take it over. The company grew and soon the owner started buying various residential and commercial real estate properties. The owner was an avid fisherman, and his plan was to eventually retire so he could spend more time with his wife and go on various fishing expeditions around the world. When that time came, the owner’s son expressed very little interest in taking over the company, so the decision was made to sell.

Assessment: The business had become a market leader and had a reputation for the highest level of quality. We knew this company was probably too large for a financial buyer. We also knew it would have no shortage of interest from strategic buyers and Private Equity Groups.

Deal Process: There was much interest from potential buyers. We selected an exceptional offer from a unique buyer that had made dozens of acquisitions. Their model consisted of buying quality businesses that had an excellent culture from owners that were retiring. This buyer purchased 90% equity and the retiring owner retained 10% equity. Additionally, all employees were given 10% equity and would receive additional equity every year until eventually most of the company would be employee-owned. Our client would be given the ability to interview and hire his replacement within a six-month transition period.

Major Challenge: Based on more than one discussion, the owner knew his wife had been ready for him to retire for the last several years. She also knew their son was not interested in taking over the company. The owner shared with his wife that he had received an excellent offer to purchase the business and was inclined to accept. Unexpectedly, his wife did not seem to share his excitement. After a few days of thinking it over and talking with his wife, the owner was having second thoughts and regretfully informed us that he would probably decline the offer.

Solution: We understand the emotions involved in selling a company that an owner has poured much “blood, sweat, and tears” into building. We explained to the owner it can be an emotional roller coaster once an owner or their spouse realizes selling the company is a reality. We suggested taking a step back and looking at the pros and cons objectively with his wife and for them to pray about it. As his advisors, we did communicate that this was an excellent offer and if he passes, we may not see another offer this good. Most importantly we wanted to make sure that he and his wife were confident they were making the best decision for their family.

Result: Closed transaction for 25% over market value and our client’s son received equity at no cost to him.

Conclusion: Selling your company is a life-changing event. We see the range of emotions our client’s experience. Many times, owners have second thoughts during the process. It is our experience that our clients are extremely happy and have zero regrets after selling their companies. In fact, many of our clients end up becoming lifelong friends.