Acquisition Advisors exclusively represented Doug and Janelle Brooks in the sale of Automated Mail Service (AMS), a full-service direct mail and commercial mail presort company with 65 employees and more than 30 years’ experience serving northeastern Oklahoma. Doug and Janelle Brooks located and purchased Automated Mail Service (AMS) in 1996 through a business broker. Janelle is a CPA and Doug is a former CEO and turnaround expert. They wanted to contribute their talent and experience to their own business.
Over the next 10 years, they built AMS into the dominant postal service bureau and presort mailer in the region, servicing virtually all major hospitals, schools, churches and corporations. With the purchase debt long ago paid off and 65 loyal employees running the business, Doug and Janelle enjoyed an enviable quality of life. Neither worked full time and they traveled regularly. Still, they were approaching traditional “retirement age” and together they pondered their future.
Why keep working even the handful of hours each week? Why continue to deal with the minimal headaches of owning and running a sizeable business? Why not be completely free to travel and even reside elsewhere for months at a time?
So Doug and Janelle contacted David Perkins at Acquisition Advisors, an acquaintance that they had made years prior. In short, Acquisition Advisors estimated the price and terms that could be obtained, net of fees and taxes, and together they developed a confidential plan. Acquisition Advisors executed the plan and eight months (and a lot of hard work) later, the Brookses had their freedom.
Update: A few years after the deal closed, Acquisition Advisors helped the new owners make a little add-on acquisition, and we are happy to report that all seller financing from the original deal has been paid in full as agreed and the business is thriving.
Confidentiality: The Brooks’ were naturally concerned about confidentiality. That’s one reason they chose Acquisition Advisors. The Acquisition Advisors dealmaker visited the business only one time, at the beginning of the project, and buyer visits were kept to just one each.
Buyer Search: AMS was a business that did not clearly fit into a single buyer type, or even two. It had attributes that would appeal to individual, industry and financial (private equity) buyers. Our analysis also left us unsure as to which buyer type would be willing to pay more, but our hunch was that it would be individual buyers. But individual buyers are more difficult to locate and notoriously undercapitalized and fickle. Still, we targeted individual buyers and smaller regional private-equity groups and succeeded in getting enough buyers to run an efficient process.
The 1st Buyer Falls: Our top two offers came from individuals. Our third best came from a private-equity group. After assessing our options, the client chose to attempt to close with what we considered our “A” offer, but it soon became clear this buyer was not going to be able to perform. The “B” buyer was brought in and financing became a problem. We were trying to get the deal done during the worst bear market since 1929. We believed that our “C” buyer would be able to get the deal done despite the challenging credit market, and at one point our “B” buyer gave up. But we all met to assess and strategize, and Carla and Michael Covey closed on their purchase in February 2009. They were the seller’s sentimental favorite, in part because they are a husband and wife team (as are the Brooks).
Buy Opportunity Presents Itself: While we were trying to get a deal completed with the “B” buyer, the only major local competitor of AMS contacted AMS with the news that it was failing. It made sense for AMS to buy this business for a myriad of reasons, but doing so would require Doug and Janelle to contribute more capital and time. To be sure, the purchase would make AMS stronger, and make the deal better for the buyer, so the Brooks did what was a win-win for all parties — purchase the business, assimilate all the customers, wrap the new business into AMS and pass the added value to the buyer at no extra charge.
Acquisition Advisors could not speak more highly of Doug and Janelle Brooks. They are exactly the type of client that we wish to serve—one who deserves a nice payday.
We selected David Perkins and Acquisition Advisors. They did a great job. It’s quite a task, selling a business, but Perkins and his team managed it very well. We got our deal done. I certainly recommend Acquisition Advisors.
Doug and Janelle Brooks