Transactions

Emjay Corporation

Exploring options with two pre-emptive buyers …

Situation
Emjay is a retirement plan administrator with over 2,000 retirement plans under administration and total assets under trusteeship of $1.7 billion at the time of the sale.

The owner of Emjay wanted to retire (the rest of the management team would remain). A few buyers had approached the owner, and he wanted help sorting through the options.

Scope of Mertz’s role
Mertz advised Emjay in preparing analysis materials, evaluating options and participating in negotiations with Norwest.

Emjay had two distinct alternatives. One was to merge with Norwest (now Wells Fargo, which is the seventh largest bank in the country). The other was to work as a platform company with a nationally recognized private equity group to affect an aggressive national roll-up.

Mertz evaluated the market for Emjay and found there were actually several other options. This strengthened Emjay’s position when negotiating with each of the two parties. In the case of the private equity group, Mertz was instrumental in working with Emjay management to develop a complex financial model to analyze required performance and related returns with the roll-up strategy.

The owner benefited from a stock-for-stock exchange with Norwest that deferred taxes. Emjay provided Norwest an excellent base of business for retirement plan administration and an entree to the $1.7 billion under trusteeship for money management.

Mertz's value add
Mertz evaluated the market for Emjay and helped negotiate a sale to Norwest at a value that exceeded industry multiples.