Transactions
Woodhead Industries
Identifying a non-apparent private equity buyer …
“I sold a company without an intermediary and learned the hard way it is a complex process. The experience was less than satisfactory. I sold Autotrol with Mertz and as a result was better able to anticipate problems and avoid misunderstandings. I would highly recommend Mertz to anyone looking to sell a company or business unit.”
– Lyle Anderson, President, Autotrol
“Mertz is forthright and has integrity. I truly enjoyed working with Mertz and look forward to doing so again.”
– Steve Sandy, General Partner, Gateshead
“Mertz has a solid understanding of both business and technical issues when selling a company. Mertz knew when to get me involved and always did so at the appropriate time without hesitation.”
– Rich Naughton, attorney for Autotrol
Situation
Autotrol is a niche manufacturer of sub-fractional horsepower gearmotors sold primarily to OEMs in the consumer appliance and industrial controls industries, among others. One customer has grown to account for approximately 50% of Autotrol’s sales, so Mertz had to address concerns regarding customer concentration.
The company was experiencing significant sales growth and identifying opportunities for additional growth.
Two partners owned Autotrol, and the majority owner wanted to sell and retire. The minority owner also wanted to sell, although he wanted to remain with Autotrol for a few more years to participate in the future growth of the company.
The owners thought the most logical buyers would be other operating companies in related industries, but not in the same niche as Autotrol. Private equity groups that owned related portfolio companies were also identified as logical potential prospects.
Scope of Mertz’s role
Mertz prepared various marketing materials including a detailed overview and offering document and a customized database of manufacturers in related industries and private equity groups with portfolio companies that manufacture electrical products.
After marketing aggressively to the apparently logical buyers, Mertz expanded its marketing efforts and contacted all private equity groups in Mertz’s proprietary database, whether or not they had related operations.
Mertz distributed approximately 50 offering documents, primarily to private equity groups and individual buyers identified through networking contacts in our proprietary database. Through this effort, Mertz generated interest from numerous private equity groups resulting in four competing offers. Only one of the finalists had a related gearmotor operation. Autotrol would be a new opportunity for the others.
Mertz’s value add
Mertz expanded marketing efforts and was able to find the best buyer through contacting private equity groups. Mertz identified motivated and not obvious buyers.
The owners satisfied not only their value expectations, but also their vision for growing the company.