Distributor (Construction Products)

Challenges

A smaller company bought by the former CEO of a public company, intended as a project and a nest egg for his retirement. But the company languished when new technologies and products encroached on its market position. The owner was increasingly concerned that his investment would evaporate. There were no buyers for the company at anything close to what he considered an acceptable valuation.

Solutions

  • Established and clarified competitive strengths. The company had an enduring reputation for quality, knowledge, service and customer care... a solid brand.
  • Acquired a potential competitor that specialized in newer technologies. It was a smaller company with new skills but lacking our client’s brand recognition. The target company had little organizational strength or structure.
  • All-stock acquisition required no cash. Considerable value was created with the combination, which allowed a win-win for all.

Outcome

Updated products, expanded growth opportunities and enhanced competitive position allowed our client to negotiate better terms and territory with his major lines. We established a compelling value story and attracted interest from potential acquirors based on a leading-edge product line, a new tier of management strength, expanded markets and a fifty-year reputation. The owner eventually elected to sell to his new partners who were able to finance an attractive buyout.

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