Why Run A Divestiture Process?
Selling your most significant asset is a complex transaction and a once in a lifetime event. With professionals on both sides of the deal – and several twists and turns bound to develop on the way to closing – you owe it to yourself, your family, employees, and customers to create the right path to a successful transition with a sustainable future.
Our process begins before engagement by confirming that the owner’s value expectations align with the company’s expected value range. Once engaged, we build the Confidential Information Memorandum (“CIM”) that will be used to tell the company’s unique story to prospective buyers. Then the marketing campaign begins to identify interested strategic buyers.
Next Point follows up as necessary to answer questions, schedule tours, and move towards an LOI. When an LOI is accepted, Next Point works together with your legal and CPA teams to negotiate and complete due diligence to a definitive agreement and closing.
Our CIMs Are Incomparable
You don’t get a second chance to make a first impression with a serious buyer. This is why your Confidential Information Memorandum (“CIM”) is vital – it is your one chance to tell your story to a buyer who means business.
Selling your business is not about what you want as a seller. It’s about what you have to offer the buyer. It is essential to focus on the elements of value that will produce the best result for maximizing your value while mitigating risk for the buyer.
Our knowledge of the metal manufacturing industry provides a deeper understanding and insight into the industry metrics and criteria that buyers find most valuable.
Our CIMs are designed to address these critical investment metrics up-front so that buyers gain a clear perspective on the opportunity from the outset.
Our Data Makes Us Different
We have compiled information over the last 20 years using multiple research sources into our proprietary database of over 25,000 metal manufacturing companies to create a resource far more comprehensive than any list you can buy.
Our database includes over 3,900 metal manufacturing companies as “serial buyers” because they currently own multiple metal manufacturing companies and are proactively looking to acquire metal manufacturing companies that fit their acquisition criteria.
Better Buyers, Better Results
Value is in the eye of the beholder. It is crucial to have as many prospective buyers evaluating your company as possible; each one will value the company differently.
We match your business characteristics with strategic buyers actively seeking those attributes for acquisition.
We know which buyers are in search of extra operating capacity in CNC, stamping, metal fabrication, etc. We also know which buyers focus on adding new customers in specific industries such as aerospace, medical, oil & gas, etc.
Larger industry consolidators and private equity firms often have minimum financial performance thresholds. Location is less of a concern for large companies, while smaller operations are often sold to buyers within their geographical radius.
We consider these factors and many others when we scrutinize our proprietary database to determine who are the most likely strategic buyers for your business.
We Negotiate From A Mutual Gains Approach
We start with honest, straightforward dialogue. Negotiations begin with identifying what success looks like for both sides.
Next Point utilizes a mutual gains approach to bridge the gap between buyers and sellers. Our negotiation strategy presents creative ways to approach deal structure so the result is a win-win for all parties.
There are often gaps in an LOI. Our process engages one-on-one with the buyer asking pertinent questions so that we have a clear and complete picture of the buyer’s intended deal structure. We identify critical issues up-front.
We work directly with your legal team and CPA firm to mitigate legal risk and tax consequences.
Today’s Challenges in Metal Manufacturing
The Game is Changing
The game is changing for small metal manufacturers as customers continue to demand more from their suppliers. Old business models need to be adjusted, and metal manufacturers need to become more efficient and versatile to compete in the future.
For these small business owners to win more business, or to keep their existing business, they need to provide their customers with a broader range of services.
The additional pressures for lower costs, faster delivery times, increased production capacity, and higher quality standards all add-up to require change.
The necessary growth demands more working capital. It creates additional financial and execution risks involved in implementing initiatives such as new QC certifications, attracting, training and retaining additional skilled labor, software upgrades, new capital equipment, and other improvements needed to meet customer demands.
Buyers today recognize the void in their business model and find there are only two ways to make changes to meet customer’s demands, organic growth, or growth through acquisitions.
Many metal manufacturing buyers find it faster, cheaper, and less risky to buy a company with an existing skilled labor force, upgraded systems, updated equipment, compliance certification requirement, existing customers and cash flow with predictable gross margins, than it is to organically grow their business to meet their customers’ capacity pricing, and delivery demands.
Their strategy is to drive some duplication of costs with economy of scale, improve operation efficiency with greater equipment utilization and an increased skilled labor pool.
It starts with a conversation. Where do you want to be in the future? What has to happen to make that possible? What’s holding you back?
The conversation is free and confidential. Call Dean “Rocky” Rockwell 716-713-2800 or email me at email@example.com