Contract Medical Device Manufacturer
Founded in 1991, this Contract Medical Device Manufacturer (the “Company”) had evolved into an integrated supplier of OEM Silicone Medical Devices and Components. Built on superior on superior quality and a solid commitment to meeting the challenge of any silicone application the owners had attracted a blue chip customer and talented team of people.
The Company had the equipment and skills to build the tools and prototype parts as well as handle the production run all under one roof. The facility located in the Midwest had ample capacity and talent for expansion and needed to find the right buyer that could see the opportunity to take this business to the next level of success. However, the financial and management systems were not sophisticated and could potentially be a problem in the sale process.
The two owners interviewed a number of investment banking organizations and selected Focus Capital Advisors based the strong financial skills of our team as well as strong references from previous clients. Our team was able to re-organize the financial records to best present the opportunity to potential buyers and prepare the business for rigorous due diligence.
Using a high quality Confidential Business Profile and in-depth industry research, we were able to present the opportunity to over 100 qualified buyers. The list was methodically reduced to 9 management presentations that resulted in 7 offers, all of which were substantially above the target our client has set for us. Once the finalist was selected we negotiated a solid LOI and carefully managed the due diligence process solving several objections along the way. Several tax challenges developed during the negotiations which we proposed and implemented strategies that reduced the tax impact to our Sellers. Additionally, the ability to provide a solid Net Working Capital Analysis helped the buyer and seller find an acceptable level that also resulted in no post closing conflicts.
The two owners remained active with the business post closing and implemented a pre-established integration plan that led to their celebrated retirement after two years. The sellers also continue to enjoy the rental income the buyer pays as a tenant in the facility the sellers continue to own. Today they remain a solid referral source of new opportunities.