Transactions
Wilderness Log Homes and
Greatwood Log Homes
Selling two companies in the same industry to one buyer …
“The people at Mertz are dependable. Antietam purchased two companies with Mertz as the investment banker, and I would not hesitate to buy another. I have even considered hiring Mertz for an add-on acquisition search for one of our portfolio companies. In my book, Mertz is a top-notch firm.’
– John Silseth, Antietam Corporation
“Mertz is one firm with which I really enjoy working. We immediately established mutual respect and an excellent working relationship. There is no question in my mind that Mertz's excellent judgment and many contacts add great value.”
– Tom Simonis, Quarles & Brady
“The Greatwood transaction had many unique challenges from both a legal and business standpoint. We relied on Mertz to pay attention to the business details of the sale and acquisition and were not disappointed! Working with two competitors who would remain competitors if the deal did not go through is not easy, but Mertz made both sides feel comfortable without breaching confidentiality, and the deal was closed. I look forward to working with Mertz on future transactions, and would certainly refer them to other buyers or sellers.”
– Ed Heiser, Whyte Hirschboeck and Dudek, SC
Situation
The owner of Wilderness Log Homes hired Mertz to sell the company. At that time, Wilderness was among the top ten percent of all log home manufacturers, in terms of number of homes produced and number of builder dealers. Furthermore, the log home manufacturing business was, and still is, fragmented, with the largest company capturing less than ten percent of the entire market.
Mertz sold Wilderness as a platform company to Antietam Corporation, a private equity group.
Subsequently, the owner of Greatwood Log Homes wanted to sell. Greatwood was a competitor to Wilderness. While the owner of Greatwood felt Wilderness could be an excellent buyer, he was concerned about sharing confidential information with a competitor.
Scope of Mertz’s role
Mertz Associates, under separate engagements and at different times, advised Wilderness and Greatwood in designing marketing programs, preparing offering materials, developing customized databases, contacting potential purchasers and participating in negotiations with purchasers.
As in many engagements, Mertz obtained solid, up-to-date knowledge about the key players within the industry and their strategies when marketing Wilderness Log Homes. Log home companies from across the country expressed interest and came to visit. Mertz also marketed the opportunity to private equity groups as a potential platform company.
Antietam, a private equity group, was the best fit for Wilderness. Antietam saw growth opportunities both internally and through acquisition, and was pleased that management was in place.
Subsequent to the completion of the Wilderness transaction, the owner of Greatwood wanted to sell. He hired Mertz because of Mertz’s experience selling Wilderness. Mertz knew Antietam would be uniquely motivated to build upon their platform company (Wilderness). Greatwood offered a different style of home at a different price point. In addition, Greatwood was close by and had complementary manufacturing capabilities, meaningful sales volume and backlog.
Mertz lead Antietam and Greatwood through the delicate issues of negotiating and working through due diligence issues with a direct competitor. Furthermore, Mertz provided insights as to the marketability and other options for Greatwood.
Mertz’s value add
Mertz worked with Wilderness to find and develop the best options possible for selling the company. Greatwood benefited from Mertz’s up-to-date knowledge of the industry and Mertz’s experience in how to work through sensitive issues with a direct competitor.