The shareholders of Elite Buildings selected Acquisition Advisors to represent them in the divestiture of their interest in the business. Acquisition Advisors developed and executed a quiet, confidential and effective strategy that resulted in a transaction that met all of the client’s primary goals and objectives.
The Elite shareholders had other investments and did not want to continue to nurture Elite, but in addition to wanting to maximize their return, they wanted to find a buyer that could succeed with and grow the business.
Among the candidates identified by Acquisition Advisors was a Dallas-based company, Pala Technologies. Pala is a control systems integrator that wished to develop the capability to produce control boxes. Acquisition Advisors became aware of this through industry contacts formed from prior transactions.
One of Pala’s core industries was telecommunications, which happened to be a high-value market for Elite’s products. And so Acquisition Advisors presented the opportunity. It was well received by the controlling shareholder of Pala, but reaching agreement on price and terms was a challenge. The price gap was bridged by a skillfully negotiated earn-out agreement that satisfied both parties, and the deal was closed. The deal called for Elite to be consolidated into the Dallas operations of Pala Technologies.
Challenge #1: Elite’s interim performance was weak and its mid-level management team was thin. This created a challenging environment for maximizing value. The most effective resolution was to stress the synergistic characteristics and emphasize the growth opportunities. An earn-out agreement was the only real way to maximize value and bridge the price divide between buyer and seller.
Challenge #2: The controlling owner insisted on being directly involved in negotiating the deal terms. While satisfying the seller’s need for control, it’s far less than ideal and rarely effective. In this case, Acquisition Advisors believes – while a fair deal was completed – that money was left on the table due to the seller’s inability to adhere to the disciplined value maximization formula developed and used by Acquisition Advisors.
The experience and connections of your M&A firm matter. Purchased lists and databases would not have uncovered Pala Technologies – the ideal buyer for Elite. It was through relationships forged, nurtured and maintained by Acquisition Advisors principals that Pala was found and the Elite shareholders were able to complete the transaction that they desired.
Don’t flinch when YOUR moment of truth arrives. We call it the moment of truth. It comes in every deal. It’s when the opposing party wants to negotiate directly with Acquisition Advisors’ client. The reason? Because they know they can get a better deal by doing so, of course.
Acquisition Advisors works a process that is designed to maximize the value derived by Acquisition Advisors’ client. It works only when the client adheres to it. It takes discipline. Most clients can, and do. Some cannot, and do not. Don’t let it be you. If you don’t buy into the Acquisition Advisors model, don’t hire us.