Case Studies
Business Owner Received an Offer with No Exit Plan in Place
The Situation:
$10MM revenue, 30-year well-established building automation company unexpectedly received an offer from a competitor.
Without an advisor, the owner tried to negotiate a deal on his own. The negotiations dragged on while the owner provided confidential information about his company without a proper NDA to protect his proprietary information putting the business at risk. He did not know the value of the business so he could not assess if the offer received was at market. He also did not understand the terms, how to mitigate taxes, or the potential impact of a liquidity event on his wealth.
His wealth manager recognized that he desperately needed guidance in preparing and executing the sale of his business and referred him to Legacy Partners.
Key Owner Questions:
- With just one buyer, how do I know if this is a good offer or if the buyer is trying to steal my business?
- Can I afford to sell and live the life I enjoy currently as a business owner?
- How can I minimize taxes?
- I have groomed two employees to take over the business. Is an internal transfer the right option or should I sell it to an external buyer?
Quantifiable Results:
We created and executed a Master Exit Plan®, selling the Company for 47% over the original offer and negotiating the structure of the deal that resulted in a tax savings for the seller of over $1MM in taxes.
Sell Now or Hold and Grow?
The Situation:
$49MM revenue, 20-year, well-established manufacturing and distribution company owned by two partners who did not have an exit strategy in place but had received an offer from a buyer to purchase 100% of the business.
Key Owner Questions:
- Will the offer meet our financial goals?
- Is now the right time to sell or should we grow the business and sell later at a higher value?
- What happens to the business if one of the partners becomes incapacitated or dies?
- How do we assess if a buyer is the right cultural fit for us?
Quantifiable Results:
Legacy Partners created an actionable Master Exit Plan® that answered all of the above questions and addressed both partners distinct and shared business, financial, and personal goals. Revenue increased 41.3% within eight months of activating their plan.
Is a Family Succession or a Third-Party Sale the Right Exit Strategy?
The Situation:
Multi-generation hospitality company owned equally by two siblings ready to retire. Two children, also working in the business, were interested in taking over ownership.
Key Owner Questions:
- What is the value of the business if sold to a third-party in the current M&A market?
- Would a family succession transfer meet the owners’ and the next generations’ financial goals?
- Are the children emotionally and financially prepared to take over the entity?
Quantifiable Results:
The business was sold to an external buyer for just under $60MM which was within 4% of our calculated enterprise value. The children transitioned into positions under the new ownership. The father also provided seed capital for them to start their own businesses in the future that are more aligned with their personal passions.
Optimizing a Highly Sought-After Technology Company
The Situation:
$6.6 MM revenue technology company was being actively pursued by investors. The owner wanted a valuation and analysis of the business through a buyer’s lens so he could understand the proper strategy to deploy in order to grow the company and increase value and marketability in anticipation of a future exit via a sale to a third-party.
Key Owner Questions:
- What is the current mergers and acquisitions value of the business?
- How do I optimize the business to increase value and marketability?
- Do I need to increase value to meet my personal financial goals upon exit?
Quantifiable Results:
Legacy Partners created an actionable Master Exit Plan® that answered the above questions, which enabled the owner to make informed decisions that would support his goals. Revenue increased 56% and EBITDA 95% within two years of executing the plan.
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