Generational Equity Closes Another Deal
Today we thought we would boast a bit by highlighting a deal that we closed late last year. We do this from time to time in order to ensure that owners of privately held businesses are aware that despite the volatility in our economy and geo-political uncertainty, companies are still being acquired. Last year, in fact, represented a solid turn around year for overall M&A activity in general and for Generational Equity as well. The deal we will be discussing today is just one example of this.
In November of last year, our client, Ace Packaging Limited (Ace), was acquired by Bellwyck Packaging Solutions (Bellwyck). The transaction closed on Nov. 17, 2011 and was led by Generational Equity managing directors Doug Smith and Mike Hammer and vice president Michael Goss.
“The offer presented by Bellwyck was creative in addressing the needs of the Sellers and was structured very effectively to realize the full potential of the synergies of the companies,” said Hammer.
In business for over 25 years and headquartered in Ontario, Canada, Ace specializes in the secondary packaging of over-the-counter and prescription pharmaceuticals, as well as health and beauty products. Ace operates out of a state-of-the-art 30,000 square foot facility, allowing them flexibility and the ability to achieve the highest levels of customer satisfaction.
“The acquisition of Ace is a great addition to Bellwyck. We will now be able to offer the current customers of both Bellwyck and Ace a broader suite of products and services and continue to expand Bellwycks’ one-stop fulfillment concept.” said Jeff Sziklai, CEO of Bellwyck.
Bellwyck is a Toronto-based manufacturer of premium and pharmaceutical folding cartons specializing in complex production runs in several high-end markets. With the acquisition of Ace, Bellwyck will now have over 300 employees.
“Ace is an excellent acquisition for Bellwyck,” according to Generational Equity’s president, Ryan Binkley. “Being able to capitalize on the reputation and customer base will be pivotal in the future growth of Bellwyck in both market share and revenue.”
The Keys to the Deal
As you can see, I have purposely highlighted some key words in the paragraphs above. I emphasize them for one reason: They all revolve around one key concept regarding buyer motivations — synergies.
Synergies result from the combination of a seller’s intangible assets with a buyer’s “off balance sheet” assets. What are these assets? These are items that don’t show up on your balance sheet that buyers find of tremendous interest. It is the old 2+2 = 5 scenario, where your unique features when combined with a buyer’s can lead to tremendous growth above and beyond that shown on the pro forma financial statements.
Every company has intangible assets, some more than others. Unfortunately, too many owners of privately held companies overlook or are unaware of their intangible assets that could attract potential buyers. Fortunately, we have written a whitepaper on the topic of these types of assets. It is designed to help you start brainstorming the features of your company that buyers may find of interest. If you would like to download a free copy, please click here.
Determining what makes you unique is just the first step in finding a synergistic buyer. The critical second step is creating documentation in an offering memorandum that will effectively document your past and draw attention to your company’s future earnings potential. This is where Generational Equity plays a key role, as we did with Ace.
Finding the optimal fit for our clients is both an art and a science. The science is doing research to determine what buyers are buying and why. The art is crafting an offering memorandum that outlines why a buyer should find your company attractive. Both the art and the science take years of experience to perfect. Fortunately for our clients, Generational Equity dealmakers are unsurpassed in their ability to find optimal buyers and close deals.
If you would like to learn more about our process and us, please contact us. To allow you to get to know us better, we offer free, no-obligation workshops that are designed to help you not only learn more regarding our services, but also more about how and when to exit your business for the most profit.
Business owners who attend our conferences tell us that the investment of a few hours to attend is well worth it given the wealth of information that is provided. If you would like to learn more about our conferences, please click here. If you own a privately held business and are like most of your peers and have no exit plan in place, Generational Equity would be glad to meet with you to help you begin the process of finding optimal buyers for your company just like we did for Ace.
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