The owner of a mid-market process manufacturing company planned to sell his successful company and exit the business. In the absence of other financial advisors and any prior experience with transactions, he needed a “helping hand” to prepare for the due diligence process and with negotiating several elements of the transaction. As the deal progressed, the buyer proposed new terms complicating the transaction and increasing the amount of communication required between all parties.
The sole owner of the company was looking to exit after successfully growing his business for many years. He did not have a Chief Financial Officer (CFO) or other transaction advisors. He needed a trusted advisor to guide him throughout the process.
WBL acted as the seller’s primary financial advisor, advising the owner and analyzing various alternatives in the structure of the sale. WBL was involved in four phases of the deal:
- WBL met with the seller and potential buyers to assist in the negotiations on the letter of intent
- WBL worked closely with the seller’s attorney to provide input on the financial implications of the deal including reviewing the sale documents
- When the buyer wanted to modify the terms of the transaction, WBL assisted the seller with the negotiations
- WBL assisted with the tax allocation of the purchase price of the assets sold in order to maximize the after tax proceeds to the seller
The sale was a success for all parties. WBL was able to maximize the seller’s after-tax cash flow in excess of his original expectations, creating the “nest egg” the seller wanted as a return on his investment and ensuring that he could live comfortably. WBL negotiated a deal structure that was more acceptable to the seller than the originally proposed structure. The buyer was very happy with the business he bought and with the thorough work performed by WBL. They hired WBL to provide services to the new company and were able to grow it and increase profitability.
For more information about this case study or to discuss your next transaction, contact:
|Bruce Benator, Audit Partner
Transaction Services Practice Leader