The shareholders of McElroy Fluid Power 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.
McElroy Manufacturing, Inc., founded in 1952, is the worldwide leader in the manufacture of polyethylene fusion machines. In 1983, McElroy added the fluid power division to the company and became a regional distributor of hydraulic components. The initial strategy was to lower the cost of its own fluid power needs, but it soon found itself committed to becoming a U.S. leader in hydraulic equipment supply. Indeed, McElroy Fluid Power became a leading U.S. supplier of mobile hydraulic components.
Walvoil S.p.A., of Reggio Emilia, Italy, approached McElroy about buying the company. Walvoil was impressed by McElroy’s strong reputation; extensive, loyal customer list; and talented staff. It saw McElroy Fluid Power as a highly attractive asset to directly enter the U.S. market.
Seeking experience in M&A transactions of midsize private companies, McElroy turned to Acquisition Advisors for assistance.
Deals don’t get done on their own. It requires hard work, skill and experience.
Because Walvoil was the only buyer candidate entertained by McElroy, we could not garner negotiating strength from other suitors. To maximize price and terms for McElroy, we had to expend considerable effort to assess other areas of negotiating strength. Also, cultural differences between Italian and U.S. negotiating norms had to be understood, considered and accommodated. Through careful pulling of each negotiating lever and exercising considerable patience—more than customary in the U.S.—we were able to secure a beneficial deal for both parties.
When the buyer does not feel the threat of competing bidders, negotiating is difficult. In this case, we channeled significant time and effort into researching and identifying all points of leverage to increase transaction value for our client.
Tulsa, Oklahoma, USA
Reggio Emilia, Italy, Europe