Exit and Growth Strategies for Middle Market Businesses

Archive for 2011

Corporate Finance Associates Advises Saturday Capital, LLC

By Joe Contaldo | Jul 29, 2011

CFA Advises Saturday Capital, LLC in its Acquisition of first aid training company Code Red LLC.

July 6, 2011 – Chicago, IL – Corporate Finance Associates  is pleased to announce that Saturday Capital, LLC has acquired Code Red LLC. Code Red’s founder, Brian Leonard invested alongside Saturday Capital and will remain CEO of the company.

Code Red/Saturday Capital TombstoneCode Red, a leader in CPR, provides first aid and automated external defibrillator (AED) training to companies nationwide. Code Red was founded in 2005 by Brian Leonard with the mission of protecting the workplace from sudden cardiac arrest and workplace related injuries.  As a national training center for the American Heart Association, Code Red is able to provide clients with CPR, First Aid and AED training classes anywhere in the United States. Code Red also distributes AEDs for some of the largest AED manufacturers – serving clients nationwide.

Rob Umlauf, Vice President in our Chicago office, had a long relationship with Code Red… almost since the company’s inception.  When Mr. Leonard was ready to take the company to the next level, we immediately knew that this was a perfect fit for our client, Saturday Capital,” stated Joe Contaldo, Managing Director of Corporate Finance Associates.

“Corporate Finance Associates introduced us to the ideal situation for Saturday Capital – a great company with management excited for growth,” Patrick Doherty, Managing Member of Saturday Capital stated.

Saturday Capital is a St. Louis-based lower middle market private equity fund organized to acquire manufacturers, value-added distributors, and service companies headquartered in the greater Midwestern regions of the United States with $1 million to $3 million in EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization). Saturday Capital also invests in early stage and growth investments. For more information:

Transaction Information:

On June 13, 2011, Saturday Capital, LLC acquired Code Red, LLC in a private transaction.  The details were not disclosed.  Joe Contaldo, Managing Director and Rob Umlauf, Vice President of Corporate Finance Associates  advised Saturday Capital in the transaction.

About Corporate Finance Associates:

Corporate Finance Associates is an investment banking firm, providing lower middle-market companies with a wide range of financial advisory services in support of mergers, acquisitions, divestitures, capital sourcing, and corporate restructuring.  From project inception to completion a senior principal guides clients through every challenge, advocates on their behalf, and leverages CFA’s experience and extensive resources.  Corporate Finance Associates has  20 offices in United States, three in Canada, three in India and 14 partner offices throughout Europe and Latin America.  More information about buying or selling a business is available via the Internet at

For more information contact:

Joe Contaldo, Managing Director
Corporate Finance Associates
+1 (847) 836-7035

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Posted by Joe Contaldo.

Selling a Middle-Market Manufacturing Business?

By Kim Levin | Jul 27, 2011

What You Need to Know Now

The hour that I spent listening to an overview of the Manufacturing Industry M&A Market Monday morning was time well spent.  More than anything it confirms what I already knew to be true…even looking at a very narrow sector of the market…times, they are improving…albeit slowly.  Morgan Burns of Faegre & Benson, Michael Dillahunt of Piper Jaffrey, Mike Israel, Mill City Capital and Bob McGrath of H.B. Fuller & Company joined forces to discuss the current state of M&A in the manufacturing sector, each bringing a different expertise to the panel.  If you didn’t have time to listen, but still want to know what was said, read on. Read more »

Selling – A Rewarding Exit Strategy

By Eduardo Berdegué | Jul 22, 2011

As business owners approach retirement at a faster rate than ever, many are finding out that exiting has been the one strategic aspect of their business they have paid least attention to.  Exiting requires planning.  Will the business simply be shut down and the employees laid-off when the owner no longer wants to work?  Will it be passed on to a family member? Is there a clear succession plan in place?  Will the business be sold and if so, to whom: a relative, an employee, a competitor, or to a yet unknown buyer? Is the owner willing to finance? Is he/she counting on the equity built into the business for retirement? Is that a realistic expectation?


Selling is one of the most common exit strategies and it can be the most rewarding too. Planning for the sale of a business  involves making a number of decisions both on a personal as well as on a professional level early on.  Decisions regarding adopting more efficient business practices, more effective reporting, better organized record-keeping, and, yes, decisions regarding delegating authority and building a reliable “second layer” of management, among many others. Read more »

How Can I Increase the Value Before I Sell My Business?

By John Hammett | Jul 19, 2011

The biggest issue thMoney Blocksat we have with selling a business, that drives value, is the organizational depth.  A business owner that does everything from start to finish has a much tougher time getting full value out of the business.  A buyer is going to want to see organizational depth and structure:  someone in charge of sales, someone in charge of production or the services being delivered, and a strong financial executive.  You really need to start working today to remove those responsibilities from yourself so that you have a fully capable organization.

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Posted by John Hammett.

Buying – A Legitimate Exit Strategy

By Eduardo Berdegué | Jul 14, 2011

Although it may sound contradictory, expanding through acquisitions may prove a sound phased exit strategy for some.

There are companies whose size makes them too large for individual, life-style investors and too small for financial or strategic investors. In those cases, growing through acquisition as a means to achieve critical mass may be a good first step toward positioning the company for a future sale. Read more »

Selling a Business – The Cost of Capital

By Peter Heydenrych | Jul 12, 2011

Whether you’re selling a business, buying a business or growing a business…securing affordable funding is an absolute must.  But, what’s affordable and available to one company may simply not be an option for others…depending on the circumstances.  Our July Middle-Market Pulse took a very quick look at the types of funding available to companies at different stages of development…and the costs associated with each funding type.

Woman with GraphOne thing to keep in mind when considering funding a purchase or planning for corporate growth…if you borrow it…you’re obligated to pay it back…whereas if you seek out investors, repayment need not be part of the game plan.  Please comment on your recent experiences obtaining funding.


Read the July Middle Market Pulse.

Posted by Peter Heydenrych.

Why Work With a Private Equity Firm For Recapitalization?

By Roy Graham | Jul 08, 2011

The private equity firms really don’t want to run a business.  They want you to do that.  They will provide guidance and support, and at a board level provide you resourcesMoney that you probably don’t have today.  The object of the game is that with their help you can build the company to a much greater value and size.

Generally speaking, private equity groups, over a period of 3-7 years, want to accomplish that goal and make a second sale.  When they cash out, you’ll also cash out and it’s very probable that your second check could be much larger than your first check.

Watch the full video interview on “Why Work With a Private Equity Firm for Recapitalization?”

Find out more about raising capital for your business.

Posted by Roy Graham.



Selling Your Business Beyond Our Borders…Brazilian Opportunities Abound

By Eduardo Berdegué | Jul 05, 2011

Brazil MapBrazil continues to be a magnet for investment. Over five times as much capital found its way to the South American dynamo from January to April of this year as in the same period last year. Private equity and buy-out groups are setting up shop in the country, led by the likes of Carlyle, Blackstone, Advent International, KKR, and TPG, formerly Texas Pacific Group. While $8.1 billion were raised last year for investment in Latin America, companies are expected to raise over $10 billion for investment in Brazil alone this year.

A total 693 M&A transactions worth over $120 billion were announced in the country during 2010, according to Thomson Reuters. Some of the most notable transactions were in the energy, financial, telecommunications, commercial airlines, fast food, travel and education sectors.

At the same time, with Brazil’s currency, the Real, at a 12-year high against the dollar, some Brazilian conglomerates will continue to seek opportunities in the US to establish or expand their strategic presence here for when this market rebounds. Likely areas of activity may be in banking, food & beverage, business services & solutions, technology, and aeronautics, among others.

So whether you see yourself and your company as a buyer or as a seller, Brazil offers tremendous opportunities that you should seek assistance to better sort out. As with any cross border transaction, in addition to the standard legal, financial, operations, tax, logistics, and other aspects relevant to any domestic deal, a cross cultural dimension needs to be added to the equation, which, if not properly addressed, may irreparably hinder an otherwise viable and desirable transaction. So, talk to your CFA investment banker partner today and explore your options beyond the borders.

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Posted by Eduardo Berdegué.

Things to Know When You Sell Your Business to a Private Equity Firm

By Patrick Powell | Jul 01, 2011

Private Equity tips for business sellersAt our recent Winter Conference in Scottsdale, a select group of private equity firms participated in a discussion on the state of the M&A Industry, both from a current prospective and looking forward to 2011 and beyond.  Although each participant had a slightly different point of reference, there were definite commonalities that bode well for middle market companies.  The discussion included how private equity selects their portfolio companies, multiples, financing, due diligence and “deal killers”.  I wrote a summary of our discussion and it appears in the most recent edition of our Client Newsletter Capital Ideas.  Use this link to read the article in its entirety.

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Posted by Patrick Powell.

How Does CFA Market My Business to Strategic Buyers?

By Peter Heydenrych | Jun 29, 2011

A Holistic Approach to Selling a Business

To me the compelling reason for somebody to buy a business is “why?”  So, our objective is to find strategic buyers where the answer to “Why am I buying this business?” makes sense.   So, when we back up from there, we start a research process that includes going through our partner network to say here is a business we’re selling, do you have strategic people for it?  And then going through our research staff identifying other quality buyers.    One thing I’ve not been successful doing is mind reading on strategic answers!   So, we try to expand the net enough when we’re looking at those buyers, to say maybe there’s a geographic expansion, maybe there’s a product line expansion, maybe there’s a customer base expansion.

There’s a whole bunch of reasons why that strategy makes sense.  So, we really focus in on developing good buyers where there is a compelling strategic reason to do that.  I’ve found, you know, if the “why?” part isn’t there, then when it gets time to sign the papers at closing, somebody is going to say “Why are we doing this?”  And if they can’t sit down and say, “Well, we’re doing because it’s good sense for us,” then typically they’re not going to sign the papers.  So that’s, I think, the difference in a marketing approach.  It’s a broad approach focused on real strategic buyers.

Selling My Business

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Posted by Doug Nix.