The Situation: A $22 million printing company was doing very well, but the owner wanted to explore his options for a favorable exit. He had heard about consolidators paying handsome prices for acquisitions, and wanted to see whether a favorable sale might be possible while prices were high.

Our Approach: In order to keep the process under control, we decided to approach only two consolidators. One wanted to establish a new presence in our client’s geographic area, and would treat our client’s company as a stand-alone operation.

The other prospective buyer was already operating in the same area, but wanted to strengthen its position and broaden its capabilities.

The first prospective buyer was willing to pay a fair multiple of our client’s earnings as a stand-alone operation. The other buyer saw immediate prospects for increased sales because of expanded capabilities, and expected to reduce expenses through consolidating its existing division into the acquired company’s operation. The projected sales increases and the cost savings generated by consolidating operations made the acquisition seem especially desirable and considerably more valuable.

Our client was also concerned about that his employees be treated fairly. Happily, the prospective buyer had no intention of eliminating valuable employees simply to save money.

The Results: Both prospective buyers made offers. Because of the excellent strategic fit, the second buyer offered a price that was almost 30% higher. The owner decided that the price was right and sold the company. But he was so excited at the growth opportunities that he decided to continue working as president of the combined regional entity. (As a postscript: after the deal was done and the two companies were combined, every key employee had been retained – except two, who decided to relocate.)