Seller: Control Consultants, Inc.
Sold To: Kele, Inc.
The Company is the premier distributor of HVAC/R controls and automatic building controls in New England. They provide innovative, cost-effective control solutions and web-based facility integration designs for Commercial Buildings, Schools, Universities, Hospitals, Government Facilities and Retail locations. In addition to supplying superior products, the Company provides application engineering, auto cad drawings, panel fabrication and training for contractors on a wide array of products.
Beacon first met the owner approximately six years before beginning the sale process. After getting to know the business, Beacon provided management with an estimated range of values from a sale transaction based on the financials at the time. Beacon also suggested ways the company could enhance its value over the seller’s multi-year horizon to sale. We spoke periodically over the years as the owner and their business advisors moved closer to the desired value.
While only in his early 60s, the owner wanted to decrease personal risk while protecting and diversifying his family wealth. He was interested in working for two more years to assist with the transition and wanted to sell to a company he felt was a good fit for his employees. He identified several ideal target companies based on their reputation in the industry.
Beacon Equity Advisors assisted with the valuation, marketing, deal negotiations and due diligence necessary to bring about a deal with a national distributor based in Memphis, owned by a New York based private equity firm.
Beacon marketed the business to the five companies with the greatest industry knowledge, the best opportunity to capitalize on the acquisition and the reputation sought by the seller.
Beacon prepared an initial presentation highlighting the Strengths, Successes and Synergies the Company brought to the table. The presentation also provided big picture financial information and other key data to create interest and downplay perceived risks while maintaining seller confidentiality. Beacon then worked closely with each buyer to answer their initial questions after reviewing the package.
Beacon encouraged each buyer to submit a timely indication of interest letter (IOI) with the goal of having the seller select the two most attractive buyers for more detailed conversations over the following two weeks.
The top two groups, including the national distributor and their private equity partners were invited to Boston for a meeting with management, which initially took place off site over two days.
Beacon negotiated a seller friendly letter of intent for the purchase of the company’s stock by a Memphis based national distributor.
Beacon provided the seller with an introduction to an experienced transaction attorney to assist with the preparation of the stock purchase agreement, an employment agreement and coordinating the closing.
Beacon worked with the company’s CPA and CFO through the extensive due diligence performed by a national CPA firm and a large Philadelphia based law firm.
The transaction provided the seller with a deal nearly 30% larger than the owner anticipated when he went to market, with cash at closing making up 20% more than his original expectation. In addition, he received an attractive earn out and a two-year guaranteed employment contract at a market wage with a bonus opportunity.