Case Study 1: Landscaping Business For Sale
Challenge
In this case study, the business for sale was in a good location but the Owner wanted to complete the sale in a short period of time once an offer was received. Two buyers offered $3.2 million for the business and property, which was a full price offer. One of the buyers put $350,000 down on the business with 30 days to complete financing and close the deal or lose their deposit. When the buyers began searching for financing, one of the buyers backed out of the deal leaving the other party with a $350,000 deposit which he would lose if he couldn’t come up with the necessary funds within 2 1/2 weeks. The buyer’s business broker did not know how to solve the problem and told the buyer he would probably lose his down payment.
Solution
We intervened with the business broker representing the buyer convinced him to allow us to take over the transaction representing the buyer as our client. Since the buyer owned another business and was frantic about losing his deposit we contacted several sources in the Commercial Real Estate business and helped the buyer to do a sale-lease-back of his own business property, which allowed him to immediately gain almost $2 million in cash to make the arrangements to secure a loan for the business and property.
Resolution
The business for sale closed on schedule and the buyer took over the business and successfully managed and changed the company.
Case Study 2: Manufacturing Business For Sale
Challenge
In this case study, the owner listed his business for sale with us but due to an illness in his family he needed to move to a different state to be closer to his daughter who was suffering. The business was a great collectables business with over $6 million in manufacturing assets, $7 million in revenue and over $1 million in cash flow, but the assets were not located in this country. While the business was doing about $7million a year in sales it was serviced primarily by only two major clients, which meant the banks and other lending institutes would not consider the business for any type loan even though the owner was looking to sell for only $2.5 million.
Solution
Working with an out-of-state company, we kept the listing for the business and interviewed over 1,000 potential buyers until we were able to locate the right person. We worked with the buyer and his funds to find a middle ground that was tenable to both parties. Since the buyer was able to make the commitment in funds and time to take on the project, we structured a deal that allowed the seller to stay on in a reduced capacity and consult with the new owner while taking the necessary time off to be with his family.
Resolution
The new owner is pleased with his purchase and the company is flourishing under new ownership.
Case Study 3: Start-up Manufacturing Business
Challenge
In this case study, the owner came to us seeking approximately $350,000 in funds to pay off a short term note with a private party or be faced with giving up a large portion of his ownership shares. His company was young and had good potential for future growth, but he needed help since he was doing all the work on his own. He was willing to take on an investor if he could find one to work as his partner in an effort to grow the business into its next phase. He was on a short timeline when he came to us because his note was due in four months.
Solution
We prepared an investment proposal based on the value and potential of the business and researched the market to determine the overall value if we could arrange a more substantial investment. We valued the business for sale at over $1 million in its current state and shopped the proposal to several US private equity groups and supermarket chains to develop interest in the company.
Resolution
We worked with an overseas buyer who was planning to move back into the U.S. and was reviewing a company we had for sale that wasn’t really the best use of his talents. After the buyer decided to pass on the business he was reviewing we felt the best use his marketing skills were better suited to this new startup company where he could develop an aggressive marketing plan and work with the seller in a partnership with a buy-out option. Within two months he purchased the company for $1.5 million and moved back to the U.S. to take a majority position in the business.
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