Selling a Business

How Steve achieved a sale to a major Australian finance buyer

Focus Capital Group

Industry – Sales Aid Finance

Steve helped Focus Capital Group achieve a significant sale multiple, well above traditional multiples in this sector.

The majority owner of Focus Capital Group was considering to retire and turned to Steve, now the Executive Director at Hawkview Partners to sell the business. Steve researched the local and international sales aid finance industry and capitalised on its high growth potential, and found a number of active, interested parties within the sector.

Key Outcomes

  • Sale to an major Australian finance company
  • Strong projected growth numbers
  • All cash upfront deal
focus-home

“Selling a business can often be a daunting experience for business owners.  Having the right advice and expertise at each stage of the sale process from Steve greatly assisted us in achieving a sales price that was well beyond my expectations.  It ultimately provided me with the financial freedom as I entered into my retirement”

Richard Power – Chairman, Focus Capital Group

The situation

The majority owner was the Chief Executive Officer of Focus Capital Group and had been instrumental in its considerable growth over the past 20 years.

The majority owner was planning to retire over the next few years but his retirement plans were quickly accelerated when he began receiving unsolicited offers from a number of competitors to acquire his business.

How we got results

01.

Preparing for the sale

Steve worked through a comprehensive list of tasks to get Focus Capital Group an outstanding sale outcome.  From researching the industry landscape to identifying the right buyer, Steve was able to get an outstanding result for Focus Capital Group.

02.

Identifying the strategic value

Steve thoroughly researched the Australian sales aid finance industry to determine where buyer’s interest lay and what type of business attracted the most activity. He familiarised himself with the Focus Capital Group business assessing the core strategic value drivers which existed and clearly articulated these in an Information Memorandum for prospective buyers, highlighting key financial metrics associated with the large sales aid client leasing portfolio.

03.

Finding the buyer

Prior to circulating information to prospective buyers, Steve carefully evaluated their profiles to establish if they had the financial capacity to acquire Focus Capital Group. From this research, 7 interested parties were identified.

From here, Steve was able to identify 3 companies willing to submit non-binding indicative offers for the business. Negotiations with each of the 3 companies commenced and this created significant “competitive tension” among them which resulted in multiple increases in each of their indicative offers. A preferred bidder was then selected based on price and structure of their offer and further negotiation lead to this company increasing further their final binding offer.

04.

Doing the deal

Steve assisted the preferred bidder with their due diligence requirements to ensure they derived comfort with the business and the large sales aid client leasing portfolio.

A 100% cash price at settlement was negotiated with the preferred buyer.

Take Home

Steve found the right buyer through an extensive research into the sales aid finance industry.  He identified the buyer from a list of possible targets that was developed and directly contacted.  The strategic value drivers of Focus Capital Group were clearly articulated to the buyer during the sales process and these were reflected in their final price being paid.

Business Acquisitions

How Steve found the right business to accelerate growth

Sonim Technologies

Telecommunications / Ruggedised Mobile Phone

Steve helped Sonim Technologies find a company to complement their existing business and accelerate their growth.

Sonim Technologies was seeking to grow their existing business into new markets and increase market share. They wanted a comparable company of size, complimentary customers and mobile technology that would enable their business to grow quickly.

Steve, now the Executive Director at Hawkview Partners assisted Sonim Technologies on the buy side acquisition search to find them suitable options. Steve’s deep understanding of the international telecommunications / mobile phone sector proved invaluable in providing a range of suitable targets for them to acquire.

Key Outcomes

  • Identified a suitable acquisition target
  • Developed a new acquisition strategy
  • Settled the transaction
case-study-sonim

“Steve provided excellent corporate advice. He demonstrated his expertise in assisting the company undertake an acquisition that required delicate negotiations with an international seller. As a result of this successful transaction, the future growth of the business will be greatly accelerated. Thank you Steve for your tireless efforts in making the transaction such a success”

Robert Plaschke – President and Chief Executive Officer, Sonim Technologies

The situation

Sonim Technology had only been operating in their industry for 3 years under a new senior management team. The company had made tremendous inroads in establishing and growing their international customer base and building strategic alliances with telecommunication carriers, resellers and telecommunication infrastructure providers.

Sonim Technologies saw the need to grow their business through an acquisition of a complimentary business that would expand their presence internationally and deepen their customer base.

How we got results

01.

Detailed market analysis

A detailed market analysis on telecommunications and mobile phone providers was carried out.  Key insights were developed and findings based on key acquisition criteria determined by the senior management team.

02.

Proprietary research

A short list of acquisition targets was established based on comprehensive research undertaken of complimentary businesses that included detailed market analysis, discussions with potential targets and set acquisition parameters.

03.

Evaluating potential targets

An evaluation process was undertaken of potential targets in terms of the acquisition criteria set, including pricing, structural components, depth and quality of customer bases and speaking to management, industry participants and competitors.  Indicative valuations of potential targets were also undertaken together with an assessment of their appetite and ability to transact.

04.

Final report

A detailed report was developed based on Steve’s strong technical and financial expertise together with his detailed industry knowledge.  This in-depth report was presented to Sonim Technologies outlining the most suitable acquisition targets with recommendations on how to finance the acquisition.

Take Home

Sonim Technologies was able to take advantage of its growing market position, financing structure and extensive knowledge of the industry to pursue the acquisition opportunity. The most suitable target with the appetite and ability to transact was identified and the transaction was structured to the satisfaction of both parties. Sonim Technologies was able to accelerate their growth and build significant shareholder value as a result of the acquisition.

Business Strategy and Planning

How we identified a pathway to achieve rapid business growth

Flooring Xtra

Retail Flooring

We helped Flooring Xtra develop and implement a new 5-year strategic plan that provided a clear pathway to achieve the company’s growth aspirations and set the parameters in which the owners could strategically exit from the business in the future.

Flooring Xtra had approached Hawkview Partners with the intent of developing a strategic plan for the business.  The wanted to significantly grow the business over the next 5 years and explore ways in which to achieve this business objective.  The owners were also interested in understanding how to strategically exit the business in the future.

We assisted Flooring Xtra by developing a comprehensive strategic plan that provided the critical foundation from which the company could achieve its business aspirations.

Key Outcomes

  • Identified a clear pathway to achieve business growth
  • Corporate and staff performance measures established
  • Helped the board develop a long-term exit strategy
case-study-flooring

“What I really like about the Hawkview Partners team is they have helped us formalise a business and exit strategy – all in one go. As one of the major owners of the business, we really needed help to understand how to grow the business and determine how and when we were going to exit the business in the future”

“We now have a clear pathway in which to achieve our growth aspirations, a greater understanding of how much our business could be worth in the future and how we can successfully exit it all thanks to Steve”

Scott Enno – Managing Director, Flooring Xtra

The situation

Flooring Xtra had been operating in their industry for over 6 years. The business had grown rapidly during this period with significant investment made to improve its capabilities to enable it to operate on a national basis.

The owners also identified a number of new growth opportunities within the retail flooring industry that it sought to take advantage of to accelerate its future growth.

How we got results

01.

Understanding the business

We facilitated an initial planning workshop with the owners and management to gather specific internal and external information regarding Flooring Xtra, to understand the current business and its strategic issues to be addressed as part of the process.

We also undertook an environmental scan that looked at both macro and micro trends in the Australian retail flooring industry in which Flooring Xtra operated.

02.

Developed Strategy

We helped develop Flooring Xtra’s vision, mission and values and undertook detailed market analysis to validate existing competitive advantages of the business.  Organisation wide strategies were developed and long-term objectives established.

03.

Built the Plan

We built the plan based on a thorough SWOT analysis, developing Flooring Xtra’s operational and divisional goals, identifying KPI’s for the business and the management team.

We also established critical demand generation strategies to grow the business and developed guides to support operational plans and financial targets.

04.

Manage Performance

We created a number of bespoke action plans for Flooring Xtra and established formal evaluation processes to enable the owners and management to track the performance of the business against key goals and objectives.

Based on our extensive expertise in business planning, a comprehensive strategic plan was presented to the owners and management.

Take Home

The development of Flooring Xtra’s strategic plan has provided the company with a clear pathway from which to achieve its growth aspirations and established the parameters for the owners to successfully exit the business in the future.

Debt Financings

How we secured additional bank finance to complete an equity buyout for our client

Tubeworks Furniture

Furniture wholesaling

We helped Tubeworks Furniture’s major shareholder secure the finance required to buyout the other major shareholder who was seeking to retire from the business. 

The main shareholders had been working in the business together for over 5 years with each holding senior management positions within Tubeworks Furniture.  One of the major shareholders was seeking to retire from the business and was interested to sell his equity stake for the right price.

We were engaged to structure and facilitate the transaction and manage the overall process.  We leveraged our extensive knowledge of the banking sector and were able to secure additional finance for the major shareholder to buyout the other shareholder as well as provide growth funding for the business moving forward.

Key Outcomes

  • Significant funding received
  • Seamless transition to 100% ownership
  • Personal guarantees released for the exiting shareholder
case-study-tubeworks

“Securing additional bank finance with lower interest rates and better credit terms in a challenging banking environment was a key factor in the success of the transaction. Procuring sufficient debt funding that enabled me to buyout another shareholder of the company was a critical component of the success of the transaction. Not only did Steve provide expert advice in this area but he also negotiated the key terms of the transaction itself. I am so glad to have engaged Hawkview Partners on this corporate transaction as I had been trying to get a deal done for over 3 years without success. Well done Steve for your patience and hard work”

Peter Joffe – Managing Director, Tubeworks Furniture

The situation

One of the two major shareholders of Tubeworks Furniture was seeking to retire from the business and was looking to sell his equity stake. The other major shareholder was interested in acquiring his equity however, internal funding capacities had been exhausted and a period of protracted negotiations between the parties had broken down.

We were brought on board to identify new sources of finance, negotiate the transaction and seek releases of guarantees provided by the exiting shareholder to be business’ major financiers.

How we got results

01.

Finding the right funding partner

We conducted a detailed search of major Australian banks together with other potential lenders.  Our aim was to find a suitable funding partner that understood the commercial benefits of the transaction and had a detailed understanding of the furniture wholesaling industry.

02.

Buyout proposal

Together with the major shareholder, we structured the terms of the buyout proposal, negotiated the transaction and secured the buyout funding required to settle the deal.

03.

Adding Value

We were also able to successfully negotiate the release of personal guarantees that the exiting shareholder had provided to Tubeworks Furniture’s financiers to enable the buyout transaction to be completed.

04.

Doing the deal

We assisted getting the deal done by being meticulous in our approach and dealings with the exiting shareholder.  A number of conditions had to be met as part of the equity buyout deal together with the required level of finance for the transaction being secured.

Take Home

A number of complexities existed with the transaction during the process which we handled with great care and attention.  It was through this careful and methodical approach that we were able to achieve such an outstanding result for the continuing shareholder of the business.

Business Valuations

How we compiled a valuation report that was pivotal in closing an equity buyout transaction

DaRa Switchboards

Electrical Switchboards

We helped DaRa Switchboards achieve an equity transfer in a relatively short period of time.

The majority shareholders of DaRa Switchboards were seeking to buyout the other minority shareholder who held the remaining equity in the business.  We presented a formal valuation report to the directors which was used in the buyout negotiations.

The minority shareholder accepted the formal valuation and a smooth equity transfer occurred in a relatively short period of time.

Key Outcomes

  • Valuation report relied upon and accepted
  • Pivotal document used in negotiations
  • Seamless transfer of equity
case-study-dara

“Steve’s work in completing the business valuation and determining an “equity value” for the minority interest shareholder was first class”

Shanaka Unantenne – Managing Director, DaRa Switchboards

The situation

The majority shareholders of DaRa Switchboards were interested in buying out the minority shareholder who held the remaining equity in the business.  As they were commencing negotiations with the minority shareholder, it became apparent that a formal valuation of the business was needed.

How we got results

01.

Detailed financial analysis

We carried out a detailed financial analysis of DaRa Switchboard’s business.  We reviewed historical and projected financial information as well as other key commercial information.

02.

Accepted valuation methodologies

We considered a number of generally accepted business valuation methodologies and determined an appropriate valuation methodology for DaRa Switchboards.  The appropriate valuation methodology was then applied to determine a valuation of the business and the minority shareholder’s equity stake.

03.

Detailed comparable sales analysis

We completed an extensive comparable sales analysis to provide us with relevant market transaction evidence for similar transactions undertaken by businesses of similar size to DaRa Switchboards.

04.

Submission of Report

Our high level expertise in conducting business valuations led to a comprehensive valuation report being compiled.  This report was presented to the DaRa Switchboard board.

Take Home

We provided a comprehensive valuation report which included a thorough financial analysis of the business supported by both sound valuation methodologies and relevant market transaction evidence for similar transactions.

The valuation report was pivotal as part of the negotiations and enabled a smooth equity transfer to occur in a relatively short period of time.

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