ASG Partners Client Highlight - SECO Construction Equipment

Preparing to Sell

ASG Principal Ed Kirk remembers his first hour-long phone conversation with Mike Bond, at least four months before they officially began their professional relationship. Interviewing Mike about his company, Ed heard about a well-run, stable business with loyal customers, tenured staff and an excellent reputation among its customers. Mike and Barb struck him as good, hardworking business people with high integrity.

Mike, for his part, appreciated the way Ed screened his company. "He was excited about selling the business, but he was also very interested and concerned about what our business was about," he recalls. "He wasn’t just looking for another commission."

Mike and Ed continued these conversations for about three months, and developed what both describe as a positive, trusting professional relationship that served as a foundation for the rest of the selling process. They spoke in great detail about what it would take to sell a company like SECO, what Mike and Barb could expect, which of their employees would need to be involved, how they would maintain confidentiality, how long the process would take, and who was likely to buy the company.

When Mike was ready to move forward with the sale, the ASG Partners team analyzed his company’s financial statements and performed a free business valuation. With a price range in mind, the next step was to take SECO to market.

Packaging the Business and Finding Buyers

After analyzing the market in which SECO competed, the team determined that strategic buyers - other companies in a similar or related line of business - would be the most likely acquirers. While some mid-sized companies can be purchased by individual buyers, SECO’s location in the Tri-Cities of Washington was not necessarily right for all would-be owners. Strategic buyers, however, were likely to see an opportunity to expand their market share, learn from SECO’s experience, and move into a new geographic area.

While Ed scanned ASG’s network and databases for appropriate potential acquirers, the ASG Partners team put together a professional package explaining SECO’s history, highlighting its strengths, showing off its operating metrics, giving an overview of the company’s tenured staff and customer relationships, and describing the industry and geographic area in which SECO operated. This package, known as a Confidential Business Review (CBR), would be sent out to all potential acquirers who signed a confidentiality agreement and made it through ASG’s screening process.

With the target list and CBR completed, Ed commenced approaching a list of approximately 50 potential strategic acquirers with some basic, generic information about SECO. Would-be buyers were told only that it was an "equipment rental company in the Pacific Northwest" to ensure that word of SECO’s sale would not get out to competitors or employees before a sale was finalized. Those companies that were interested signed a confidentiality agreement, and Ed spoke with them on the phone to assess their suitability before deciding whether to send them any further details.

Continue to Part III: Selecting a Buyer and Closing the Deal >>