Optimizing value in spite of marketing constraints and other challenges …
“I’ve worked with several high-quality investment banking firms. Mertz is a very fine firm and I would hire them again.”
– P. Gregory Mickelson, President, VPI, LLC
“Mertz ran a tough, but fair process. I was willing to stretch beyond my initial view of value because of how they conducted themselves. They presented the company, management and future projections along with facts and data in a manner that gave me comfort.”
– Steve Martin, Owner, VPI Floor Products
“I was very pleased working with Mertz because they quickly understood the business, its products, channels and industry dynamics. I never felt bogged down and burdened, but instead felt invigorated. I believe Mertz improved upon what management had already developed. Finally, I am delighted with my new partners and could not imagine a better match.”
– Jeremy Williams, General Manager, VPI Floor Products
The owners of VPI wanted to maximize value with a clean, all-cash-at-close transaction and keep jobs in Sheboygan, Wisconsin. One difficult challenge was maintaining a healthy relationship with a single large customer. This customer was not only interested in purchasing VPI, but also perceived other corporate buyers as a threat.
Another challenge related to financial history and projections. The financial history reflected both ups and downs, which had been driven by the tech bubble, related construction needs and ultimately the demand for static control flooring. The projections included sales from new products, customers and market channels. While several had already gained meaningful momentum, they were all still new.
The management team was exceptionally competent, wanted to have the opportunity for ownership and strongly believed in the future successes.
Scope of Mertz’s role
Mertz worked with management to develop exceptionally compelling offering materials. While the company offered much opportunity, the past was not indicative of the future.
A key to differentiate VPI from other companies was to bring selected highly qualified and interested buyers to meet with management and substantiate what was happening now and in the future.
Mertz also had to manage the dynamics with the large customer who expressed an interest in buying the company. Certain information was more sensitive for the large customer and the process needed careful care and attention.
Mertz’s value add
Value was clearly maximized as Mertz developed spirited competition with multiple buyers willing to offer an exceptionally clean, all-cash at close transaction. Furthermore, the new owners are interested in building and growing the business so even more jobs are created in Sheboygan.
A side benefit management mentioned is that Mertz actually helped to improve and crystallize the strategy for the business while working with management to prepare the offering documents.