NRX Logistics Acquired by Cardinal Logistics, H.I.G. Capital

Industry: Final Mile
Business Location: Stoughton, MA
Tenney Group Role: Advisor to Seller ($35M Final Mile Business)

What were the sellers’ motivations in deciding to pursue an exit?

The seller was fulfilling promises to his family to take chips off the table and to firmly establish financial security for the future.

What challenges were unique to the sellers as they entered the marketplace?

Buyer engagement was not a challenge. The challenge came when we were under contract (LOI) and near the closing table when the buyer’s bank notified the buyer that a 90 day moratorium was being placed on all acquisition financing (due to COVID-19). If you haven’t been part of a due diligence process in a deal before, you can appreciate how discouraging and frustrating this was for our client.

How did Tenney Group maneuver around the challenges?

We quickly pivoted to several buyers we had in the wings. We quickly made sure that our new buyer’s ability to purchase the deal was not subject to a 3rd party’s consent (bank). Then, we were able to make sure all of the efforts and time management put in during the previous due diligence was not wasted. Ultimately, transitioning to a new buyer allowed our client to obtain more money and better terms than the prior buyer was making available.

Key Takeaways for Other Business Owners:

Our client’s financial documentation was impeccable. The ease in which his team was able to obtain detailed reports at the buyer’s request supported a strong valuation. It also ensured when we faced the challenges mentioned above, we would have enough stamina to regroup and get the job done. If you want maximum leverage when you exit, start the process early when you have energy and healthy to navigate the demands of the process well. Also, get your financial house in order now. It is worth it!

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