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.