The Situation

Pinewood was retained to help a business owner sell his company to a third party.  He had acquired the business from the former owner about 4 years prior, and after running the business successfully through the pandemic, he admittedly fell out of love with the business.

The time came to understand his options, and we decided to market the business to find a third party buyer who wanted a foothold in the Aerospace and Defense industry with a list of blue chip clients, trusted products, and skilled employees.

Engagement Details

  • Industry: Manufacturing

  • Service: Sell Side M&A

  • Duration: 6 Months

The Challenges

  • While the business’s financials, products, and customers were strong, the deal had some challenges that we helped the seller navigate successfully.

  • The office was anything but paperless, with a 80 x 30 office full of filing cabinets with documents as old as 50 years (since Company inception)

  • The Company was on a month-to-month lease that hadn’t been updated in over 10 years (the buyer’s bank required a new 10-year lease, term of the loan)

  • The buyer’s bank wanted the seller to hold 10% of the purchase price for 10 years (again, term of the loan, and quite common in SBA financed deals)

  • The buyer had a list of “day 1 improvements” that gave the seller some angst for the sake of the employees

  • The buyer asked for numerous “big company” documents that the seller simply didn’t have (like most SMBs)

The Results

In the end, we worked with the buyer and its banker and fought for the seller to get a life changing deal for him.

  • The seller received 90% of the purchase price in cash at closing, plus the remaining balance of 10% of the purchase price accruing interest for 10 years, to be paid between years 5-10

  • The seller had a quick transition period, took a short-lived early retirement, and now has capital to acquire his dream automotive performance business (or 2, 3…)

  • The buyer owns a high performance A&D company that fits nicely into his existing business portfolio that he will leverage to cross sell its related services into for years to come