Transactions
C-Graphic
Meeting the seller's price expectations by developing seven competing offers …
“Mertz not only generated several options [from which we could choose], but their people also had excellent judgment for how to work through the many issues that arose while we were selling our business. Without Mertz, we never would have accomplished our objectives. Ed. Garvey is a great business fit both strategically and philosophically. I am delighted I chose to work with Mertz.”
– Fred Leverenz, a former C-Graphic owner
“I enjoyed working with the people from Mertz. Together we were able to provide excellent service to our client. Mertz is creative and pays attention to the details. I look forward to working with Mertz again.”
– Don Taitelman, Quarles & Brady
Situation
C-Graphic is a commercial, sheetfed, lithographic printer and literature fulfillment center. Customers include Rockwell Automation, Northwestern Mutual Life Insurance Company and Fortis, Inc.
One primary owner had health problems and another wanted to retire. Maintaining confidentiality within the local market was a concern. The owners had tried to sell the company on their own, but could not attain their price expectations.
Scope of Mertz’s role
Mertz advised C-Graphic in designing a selling program, preparing offering materials, contacting potential purchasers, evaluating proposals and participating in negotiations.
By aggressively studying the market, Mertz identified and built a database that included two active buyer groups: large national consolidators and regional consolidators. Also, Mertz contacted a proprietary database of advisors (attorneys, accountants, bankers, private equity groups, etc.) to develop additional prospects. After two months of marketing, C-Graphic had seven letters of intent: three from large national consolidators, two from regional consolidators and two from local buyers with printing industry experience.
Each of the seven options contained a different price, structure and business strategy. Mertz analyzed each of the options, evaluated components of consideration (public company stock, notes, earn outs, escrows, baskets, etc.) and assessed each potential buyer’s ability and motivation to close. This analysis was presented to C-Graphic’s owners in a concise and easy-to-understand format.
C-Graphic chose a regional consolidator, Ed. Garvey and Company. Mr. Garvey is an individual with significant printing experience who owns several commercial printing companies in Illinois and Wisconsin. The owner planning to retire liked Mr. Garvey’s business strategy and elected to stay with the business. The other primary owner retired, which was one of his objectives.
The detailed offering materials allowed the buyers to qualify their interest. Once the owners accepted a letter of intent, the odds of closing were very high. In the event problems developed, Mertz had several back-up buyers.
Mertz’s value add
By aggressively and competently identifying, approaching and working the market of buyers, Mertz optimized seven options from which the owners of C-Graphic could choose. In spite of customer concentration issues and other challenges, Mertz obtained competitive and attractive offers. The owners satisfied not only their value expectations, but also their vision for the company and their personal lifestyles.