In 1957, Harry Somermeyer, a graduate Chemical Engineer,
purchased his first plastic extruder and, in 1958, made his
first sale of polyethylene coiled pipe. For 40 years,
Somermeyer was president, “sole member of the board of
directors, and jack-of-all trades” for Crown-Line Plastics,
Inc. Located in Nebraska City, NE, Crown-Line’s plastic
pipes were initially used in rural water systems and small
towns. Under Somermeyer’s leadership, the business grew,
adding PVC pipe and an engineered plastics division which
supplied specialty extrusions to industrial firms.
When the time came to sell Crown-Line, Somermeyer knew it
wouldn’t be a simple job. He had a specific price and type
of buyer in mind. “We’d had some inquiries over the years,”
Somermeyer says, “but I didn’t think the people interested
in purchasing Crown-Line had sufficient capital. I was
interested in finding someone who would continue to operate
Crown-Line successfully and thereby protect the jobs of our
employees, some of whom had been with us for over 35 years.”
After thinking about the sale of his business for a few
years, Somermeyer contacted Corporate Finance Associates
Worldwide, seeking assistance.
“They were very straightforward with me,” Somermeyer
recalls. “They had lots of contacts, and the people they
dealt with were the people I was interested in selling to.
They were dealing with substantial people.”
At an initial meeting with CFA, Somermeyer explored his
options for the sale. “I heard what CFA planned to do, and I
signed a contract,” Somermeyer says. “After that, it was up
to them, and they were very persistent. They were
responsible for the interest of lots of people and, on the
whole, I was very pleased.” CFA found several potential
buyers, and Somermeyer sold Crown-Line to an investment
group whose principals, Somermeyer says, are high caliber
people with integrity and dedication to Crown-Line’s loyal
employees. CFA led negotiations that resulted in a mutually
agreed upon price and deal terms.
“I was interested in getting the value out of the
business that I thought was there. I didn’t want to sell on
a payment basis; I wanted the cash up front. And, I wanted a
purchaser
capable of handling the business,” says Somermeyer. In
addition to closing a satisfying deal, Somermeyer has a
two-year consulting contract with Crown-Line.
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When CFA was approached by Harry Somermeyer to find a buyer
for Crown-Line Plastics, they targeted two types of
prospects: strategic, synergistic buyers looking to expand
within the same or related industries and individual buyers
in the Midwest with the interest and experience to complete
the sale.
Before marketing Crown-Line Plastics to potential buyers,
CFA recommended that Somermeyer upgrade to an improved
computer system, retire some aging equipment, and
re-energize the sales staff with new leadership to increase
sales. After these value-enhancing strategies were
implemented, CFA began marketing Crown-Line.
The investment group who eventually purchased Crown-Line
expressed interest early on in the marketing process. Their
first proposal reached an impasse over several negotiating
points, and CFA continued to market Crown-Line. Other
prospective buyers made offers, but few were able to meet
all Somermeyer’s and CFA’s criteria.
“Overall, CFA took seven or eight qualified buyers through
the process and ended up with four or five offers. One
proposal came from a competitor who made an excellent offer,
but who wanted to move the company. That didn’t mesh with my
desire to do right by former employees,” Somermeyer recalls.
After several months passed, CFA renewed contact with the
investment group and led negotiations that overcame the
reasons for the earlier impasse.
Because Crown-Line eventually received five offers for
purchase, the company held its value, and CFA was able to
recommend strategies to achieve maximum value on the strength of multiple
interested parties.
“The buyer was an ideal fit,” says Somermeyer. “The
investment group had sales and marketing experience in the
metal pipe business. Therefore, they were at once
synergistic buyers and financial partners. And, I’m
satisfied knowing I’ve sold to someone who understands my
business.”
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