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Capital Ideas for Middle Market Businesses

Welcome to this issue of Capital Ideas, our newsletter dedicated to business selling, business buying and financial resources for mid-market companies.

Selling at the PEAK

Four Steps to Success

By Jay Carter, Principal
Charlotte Office, Corporate Finance Associates

I met recently with the owner of a very successful middle market manufacturing company. He is sixty-one years old, in good health and came to discuss exit options that may be available to him. After spending the last twenty-four years of his career starting and growing this business, he is now looking forward to spending less time at the office and more time enjoying his family's second home in the mountains of North Carolina.

He arrived at our offices five minutes early and appeared slightly uncomfortable. I invited him to sit down, which he did. Before I even had a chance to initiate a conversation, he hastily released the two questions that had been consuming his mind for over six months:

"I have been thinking about selling my business," he stated. "Is this a good time to sell it?" and without a pause, he continued, "or did I miss the [valuation] peak?" ... Read more »


What Recession?

Look Who Is Buying Aggressively

By Gary Roelke, Principal
New York Metro Region Office, Corporate Finance Associates

Business reporters are all beginning to sound like Chicken Little these days, but our experience says exactly the opposite is true—our many New Jersey-based entrepreneurial clients tell us that they are doing quite well, thank you. So, who is right?

Both are, depending on definitions, of course. There is no question that an incredibly narrow group of easy-money financial entities are suffering from their prior excesses, and those have soured the housing sector. Also, a few pharmaceutical giants have had their wings clipped recently. But a recession? We don't think so. Exporters are riding high; service companies are struggling to keep up with the demand; and those who planned carefully and ran a tight ship all along are thriving now.

Still not convinced? How about this unusually long subtitle for the April 2008 article by Darren Dahl in Inc. Magazine: "Investors are loaded with cash. Boomers are looking to buy. Foreign firms are eager to invest. What does that add up to? A seller's market for your business." The article finishes with an insightful note of statistical caution: the huge Baby Boomer generation is beginning to retire, and that means nearly 20% of all successful businesses will hit the market in the next few years. For the first time in memory, the supply of viable sellers... Read more »


Feature Acquisition

Situation: After learning from a respected business associate about a successful recapital- ization of a mid-sized manufacturing company, Mathey Investments, Inc. owner, Don Lockhart, contacted CFA to make a transaction happen for his companies.

Solution: Based on the seller’s business objectives, CFA targeted both private equity groups and strategic buyers to create a competitive sales process. CFA was able to attain seven LOI’s from both private equity and strategic buyers. At the end of the 30-days of site visits and meetings with the buyers, the seller selected a private equity group based on deal structure and similar business objectives. Mathey Investments, with corporate headquarters in Tulsa, Oklahoma and a manufacturing plant in Milan, Italy has the world’s largest selection of hand tools designed specifically for the pipefitter and welder.


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