What were the seller’s motivations in deciding to pursue an exit?
The company had successfully recovered from a very difficult market disruption in 2016 and the seller desired to take his chips off the table before the market turned again.
What challenges were unique to the seller as the entered the marketplace?
Liquid Bulk (depending on the commodity) is cyclical in nature. With that, there was uncertainty from certain buyers on whether this was the best opportunity for them. Furthermore, there were possible valuation gaps between the seller and the buyer.
How did Tenney Group maneuver around the challenges?
We quickly identified a buyer in the region in the same space who was both familiar and comfortable with the risks associated with the industry. As for the valuation component of the deal, we helped educate our client about the value of his business through the market (receiving multiple offers), so that he could trust the process. We helped bridge a valuation gap by tying a component of the deal structure to the buyer’s most key concern – the driver transition and retention.
Key Takeaways for Other Business Owners:
The seller, a former CPA, acknowledged how critical it was to have an industry specialist advocating for the investment value of the business to buyers. A large driver of the timing of the sale hinged on the seller’s desire to use a portion of the proceeds from the sale to bless a ministry within his church.