Transaction Description:
Case Study
The Challenge
• Herrington Industries was operated by a father and son team since its founding in 1999.
• The Herringtons wanted to exit the businesses completely after close to pursue other business ventures.
• The family wanted to sell the businesses only if they achieved their price and deal-structure terms; they were prepared to hold onto their businesses if needed.
• The Merit team undertook extensive efforts to understand the Client’s value drivers. These steps included multiple site visits, interviews with the management team, review of regulatory issues and conferring with the landfill’s external engineer.
• With the Client operating two intertwined businesses held by five legal entities, the collection and synthesis of financial information proved to be paramount importance. MIB advised the Client to hire a vetted interim CFO who helped clean up the internal financials and satisfy the acquirer’s diligence requests.
• Once under LOI, the due diligence and preparation of disclosures was comprehensive and detailed. The MIB team worked closely with the Client to ensure the process was smooth and deal momentum was maintained, allowing the Client to continue running its operations.
• MIB negoatiated with the acquirer to provide a creative deal structure to meet the sellers objectives.
• MIB ran a robust deal process that resulted in more than 125 executed NDAs. MIB found a Hybrid Buyer (Private Equity Owned Strategic Acquirer) for Herrington Industries that would honor the legacy created by the Herringtons and that had experience in executing a smooth transition for the employees.
• MIB achieved a “outlier outcome” exceededing the Clients’ original valuation expectations and guidance provide by Merit.
• MIB was able to work with the Buyer to ensure the transaction was closed efficiently and timely, which enabled the Herringtons to seize time-sensitive business opportunities.
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