Here is a Case Study of a transaction that one of our Private Equity Investors completed. Periodically, I will send you an interesting case study -- not more than every couple of weeks. If you don't want to receive them, you can "unsubscribe" at the bottom of this message.
As a bonus, I am highlighting one of the Strategic Equity Investors we represent. They will do a transaction similar to this one.
If you have any questions or comments, please send them to me.
Sometimes doing a transaction is about more than just money. In fact, in my experience, money is key, but not at the top of the list. Here's two owners that had reached their own 'concrete ceiling'. Read about how they were able to get some help from a Strategic Equity Investor to break through their own concrete ceiling and achieve their dream.
Enjoy
The Founders wanted to acquire a compatible firm for years. Why couldn't they? Their ownership structure was complicated, they lacked capital and they didn't have any major acquisition expertise.
To do the acquisition they thought would take the business to the next level, they would have to "bet the ranch". That was too big of a risk for them at this stage in their lives. And, they were afraid of running a larger and far more complex business. They had reached their own "concrete ceiling".
... was a Southeastern manufacturer of oval and round concrete pipe and pre-cast concrete structures and bridges. It had a strong market position, excellent quality and service to its customers, and state-of-the-art facilities. The Company was purchased by a Private Equity Group for $20 million when it's sales were $20 million and EBITDA was $4.5. Then, two years later it acquired the pre-cast company the founders had their eye on for years. It was the dominant player in concrete structures in it's market place.
After the acquisition of the pre-cast company, the founders asked to retire yet keep a stake in the company as part of the second transaction. A strong manager at the acquired firm stepped in to manage the entire operation.
Three years later, after sales had grown to $90 million and EBITDA to $20 million, the shareholders agreed to sell to an internationally dominant construction firm for $130 million. The 25% stake the original owners kept was worth a substantial amount of money, enabling the original owners to aggressively build their real estate investment business. It was an operation they were more comfortable with.
Two bites of the apple. The ability to create the business they dreamed of for years, but believed they were unable to ultimately run. They achieved this dream and retained substantial equity, receiving $50 million over 5 years for a company doing that was earning $4.5 Million EBITDA when they partnered with a Strategic Equity Investor. Using their profit, the owners grew the real estate business they really liked. This business has done extraordinarily well.
Private Equity groups have been pigeon-holed as financial buyers and low ball buyers for a long time. Some of their reputation is deserved. But, there are a select few Private Equity Investors that belong in a whole different investment league. To find out why most Investment Bankers think Private Equity Investors are Second Class Citizens and why they are wrong,
get a white paper here ...
Stonebridge Partners has been a Strategic Equity Investor for a long time. The firm was established in 1986 to acquire middle-market companies partnering with the management of the company.
Stonebridge has a strong operating orientation and broad expertise across a variety of businesses. They invest significant capital in portfolio companies at the time of acquisition and provide access to additional capital after the acquisition to facilitate growth. Stonebridge will support growth through expansion of a company's facilities, purchase of new equipment, and/or acquisition of complementary businesses.
Mike Bruno, managing partner of Stonebridge, said recently "Stonebridge forms a partnership with each portfolio company management team from the outset of a relationship. A long-term strategy for the business is initially established, emphasizing growth, continual improvement and enhanced asset utilization.".
And he followed up with "We maintain a hands-off approach in the daily operations of our well-run portfolio companies, and with our Operating Partners, are able to actively assist management of under performing businesses in problem identification and resolution. Stonebridge and its Operating Partners are also able to provide insight into certain areas that management teams may be less familiar with, such as systems development and implementation, worldwide product sourcing, add-on acquisition strategy, execution and integration, and strategic planning, among others."
Would you like an introduction to Stonebridge Partners? I will be happy to provide it. Just send us an e-mail ...
For more information on Stonebridge Partners, visit their website...
We are specialists. We match privately held companies with the right equity source. We never charge a seller a fee. Working with Strategic Equity Buyers is our specialty.
To discuss which Private Equity Group will meet your current needs, let us know here ...
has partnered with a top notch operations consulting firm:
Allomet specializes in helping equity investors, owners, lenders and other stakeholders assess operational problems, understand how to solve them and help oversee implementation.
Would you like to determine if an assessment of margin enhancement, operational strategy, or crisis evaluation is right for you? For a thorough preliminary consultation let us know ...
has partnered with a turnaround consulting firm:
Business CPR specializes in Manufacturing or Service companies that have revenue between $10 Million and $100 Million.
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7 Best secrets of managing a Corporate Renewal from Dr. Kash.
