| Organization: An industrial materials conversion manufacturer. | Need: Business transition guidance to achieve both personal and financial goals. | Outcome: A 30% higher sales price from using a tailored transaction tax structure. |
Understanding the situation
After more than 30 years of growing his business, the founder of a contract manufacturer specializing in industrial material conversions was ready to explore business transition options. He initially planned to sell the business to employees; however, several obstacles could not be easily overcome.
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Exploring the challenge
Unsure of other transition options, the owner — a long-time CLA client — turned to CLA’s owner legacy services team for recommendations.
CLA helped the owner formalize his business goals, which included maintaining the positive company culture and community support he had cultivated to help fuel continued business growth.
CLA’s valuation analysts established the business’s estimated sale value and CLA’s wealth advisors forecasted the net proceeds the owner would need for retirement. Upon evaluating his business and financial goals, the owner decided selling to a third party would result in his desired outcome. CLA’s sell-side consultants helped build a potential buyer list and prepared a sell-side quality of earnings report.
“CLA’s owner legacy services team was with me from start to finish in the sale, offering experienced advice to help reach my personal and financial goals. The new owner is continuing our great work, and it sold for a price I had never imagined.” — Manufacturing company owner
Achieving results
Working with investment banking teams to sell your business doesn’t work for every company, but there are other options. CLA’s owner legacy services team helped this manufacturing company handle negotiations and walk through the process step by step:
- The detailed valuation, quality of earnings report, and other financial documentation was shared with a leading buyer, who submitted an offer.
- CLA’s transaction tax team analyzed the offer and modeled out the net proceeds based on the buyer’s proposed entity structure.
- The tax team also made valuable suggestions on tax indemnifications and net working capital targets.
- Taking CLA’s advice on entity structuring, the team was able to negotiate a 30% higher sales price.
Contact us
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