What were the seller’s motivations in deciding to pursue an exit?
A parent company experimented with taking trucking/logistics operations in house. It did not enhance synergies or create the cost savings the parent company had hoped for. They hired Tenney Group to divest of that company.
What challenges were unique to the seller as they entered the marketplace?
The company had not yet established satisfactory cash flows since taking the operation in house five years prior. Additionally, the parent company gave Tenney Group only six months of runway to sell the company, otherwise it would be liquidated.
How did Tenney Group maneuver around the challenges?
We isolated the expenses on the P&L that were outside of trucking industry norms and packaged those “perceived weaknesses” as opportunities for buyers to create immediate synergies/value post-transaction. Additionally, we streamlined our typical sale process and generated the first offer on the deal in 27 days following the signing of the engagement letter with Tenney Group.
Key Takeaways for Other Business Owners:
The deal was completed in 60 days from initially engaging Tenney Group. We advised the seller that better offers may be available if we continued marketing for a few more months. Weighing the costs of keeping the doors open against the uncertainty of getting another buyer who could both close quickly and pay a higher price, the seller said “Let’s sell.” There was not enough clear potential upside to take on any continued risk. Finally, without strong financial reporting from the seller, the transaction would have likely taken far longer.
