October 4, 2021

Going from a Meager Six Figure Walk Away Exit Offer to Millions Plus a Second Bite of the Apple on a Subsequent Sale

A specialty heavy equipment company that dominated a highly profitable niche decided to sell. A private equity firm suggested by the M&A advisor expressed interest and made a generous offer. However, the seller’s attorney had dealt with this Private Equity from before and had formed some opinions on them. What shouldn’t have happened, ended up happening and it derailed the deal.

How 50/50 partners had taken over a company from the founder’s family and although they were good at their jobs in the company, they weren’t naturally born entrepreneurs and make rookie mistakes as new owners that brought the company to the brink of insolvency. Yet they went from a few hundred thousand dollars to delaying their exit and selling the business for millions and retaining equity in the company that was later sold for millions more.

How a creative deal structure can take a company with multiple revenue streams and package each of these revenue streams to different buyers with an agreement for future collaboration. This resulted in an exit value being worth more than if the company with all of its revenue streams had been sold to a single buyer.

Joseph Guarino
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Lancaster, Pennsylvania
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Podcast: Play in new window | Download (Duration: 48:42 — 44.6MB)