Case Study
LINK Enterprise helped the seller of this PCB assembly business navigate the journey from preparing the company for the market through a successful exit. Murali Barathi, M&A Advisor, represented the seller.
The company was founded 30 years ago. This company earned their reputation for their quality of service, quick turnaround, and reliability. The top customers have been with them for over 15 years.
The equipment and processes are tuned for low volume, high mix contract services. Proximity to Silicon Valley, well trained and long tenured employees were other merits of the company.
We received more than 125 enquiries and 9 offers and ultimately sold to the right buyer.
How did we do it?
Positioning the company well in the market: As soon as the engagement agreement was signed, we invested our time early on in understanding the business, its performance, the market, the journey of the founder since inception, seller’s criteria for a good buyer, and possible options for deal structuring.
Then, we worked with the seller to arrive at the right valuation of the company. This is very crucial as the seller should believe that the value is right, and the buyers should feel the same way too.
Marketing: Since we soaked enough knowledge about the business, we were able to prepare a concise, honest, and informative deck for the prospective buyers. This knowledge about the company also came handy in crafting the correct message for the marketing campaigns.
Screening and matching: Every inquiry from prospective buyers was responded to swiftly while maintaining confidentiality. The buyers were screened for their financial soundness, relevant background, and strategic fit. We educated qualified buyers about the opportunity and guided them towards the deal zone.
Offer review: As much we try to guide the buyers towards a desired deal structure, offers come with varied structures, value and terms. It is very important that the offers are normalized and reviewed with the seller so that nuances are understood and the decision to approve or to reject an offer is made objectively.
Deal structuring: It is not just the agreement on the price that makes the deal close, rather there is also a lot to cover in terms of deal structuring risk mitigation. Addressing the concerns of both sellers and buyers is critical for success. The buyer was concerned about the customer concentration issue, which was rightly mitigated by adding a seller note component. Financial soundness of the buyer was of a little uncertain, therefore we referred the buyer to an experienced SBA lender. This proved to be quite helpful because the bank did a thorough job in terms of vetting the buyer and funding the deal on a timely basis.
Tightly managed due diligence and closing activities: Negotiations, due diligence, and closing activities involve multiple parties like CPAs, attorneys, technical experts, insurance firms, landlord and banker. The M&A Advisor donned the hat of a project manager, established a cordial working relationships with all stakeholders, put in place a project plan, resolved issues as they occurred, and moved the deal towards successful closure, and eventually to transition.
The sale of your business is a big event– both emotionally and financially. Selling your firm is a complicated and time-consuming process, and you need help from an expert.
As an experienced M&A Advisor, Murali Barathi can lead you through the sale process and harvest the best value for your business.
