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NWWI / Mountbleau & Associates – Case Study

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Merit Investment Bank & Co. advises Northwest Woodworks Inc. on its sale to Montbleau & Associates LLC, a portfolio company of Crescendo Capital Partners LLC.

Client Overview

  • Northwest Woodworks Inc. is the premier provider of highly customized commercial architectural woodwork and casework, serving clients in Washington State for over 30 years.
  • The shareholders’ goal was to find a buyer who would help them achieve liquidity, while leveraging the strong performance and dominant market position of the business to usher in the next phase of growth.

Merit Investment Bank Approach

  • Merit Investment Bank faced a tempered buyer universe as a result of the ongoing market turmoil caused by the COVID pandemic. Specifically, softness in the broader market, difficulty in the credit markets, and the Work-from-Home policies’ effects on the office space and tenant improvement verticals created strong negative perception of the business despite NWWI’s strong, profitable, and growing financial performance.
  • The Merit Investment Bank team was able to overcome these difficulties by emphasizing NWWI’s position as the regional market leader and by leveraging its extensive knowledge of and relationships within the industry to effectuate a successful transaction.

Results

  • Through an efficient and well-run process, Merit Investment Bank was able to bring a range of buyers to the table. When the primary buyer was unable to perform, Merit Investment Bank acted quickly to pivot to an existing relationship with a potential buyer who was looking at the space to solicit an Indication of Interest. This occurred over the duration of a week and a half.
  • Ultimately, Crescendo Capital Partners acquired NWWI simultaneously with the platform company, Montbleau & Associates. Together, the newly formed entity will be the regional leader in the commercial architectural woodworking industry serving the Western US.
  • NWWI’s shareholders were incredibly pleased with the outcome of the transaction and are looking forward to continued growth and opportunity with their new partner.

1. Immediate Post-Closing Actions

  • Confirm Closing Deliverables: Verify wire transfers, escrow deposits, and payoff letters. Ensure all signed documents are stored and circulated appropriately.
  • Communications: Issue press releases and internal announcements. Host internal debriefs to clarify deal implications and next steps. Share FAQs to address employee and client concerns.

2. Financial & Tax Considerations

  • Tax Planning: Review capital gains implications and possible elections (e.g., 338(h)(10)). Optimize allocation of proceeds among trusts, estates, and investment vehicles.
  • Wealth Management: Establish an investment strategy for sale proceeds, factoring in liquidity, diversification, and risk tolerance. Revisit estate and philanthropic plans.

3. Operational Transition

  • Integration Roadmap: Define Day 1, Day 30, and Day 100 milestones. Align IT systems, compliance, and reporting frameworks.
  • Governance & Management: Clarify new reporting lines, identify key management for retention, and set up transition service agreements where necessary.

4. Employee Retention & Culture Integration

  • Retention Programs: Offer stay bonuses or performance incentives to key employees.
  • Culture Alignment: Host integration workshops to harmonize values and workflows between merging organizations. Use pulse surveys to monitor morale and engagement.

5. Customer & Partner Management

  • Customer Retention: Conduct proactive outreach to major clients to reassure them about service continuity. Offer transition incentives if needed.
  • Supplier & Partner Relations: Reaffirm contracts, introduce new leadership, and mitigate potential disruptions in the supply chain.

6. Legal & Compliance

  • Ongoing Obligations: Track escrow releases, earnouts, and indemnification timelines. Update registrations, licenses, and insurance policies.
  • Dispute Preparedness: Maintain a documentation log and standardized process for handling any post-closing disputes.

7. Long-Term Strategic Planning

  • For Sellers: Outline reinvestment strategies—whether in new ventures, passive investments, or philanthropic initiatives.
  • For Buyers: Execute synergy realization plans and monitor KPIs to measure integration success. Refine strategy as market conditions evolve.

8. Key Deliverables for Merit Investment Bank

  1. Post-Sale Communication Playbook – For employees, customers, and press.
  2. Tax & Wealth Planning Roadmap – Personalized for sellers.
  3. Integration Milestones Tracker – With Day 1/30/100 progress indicators.
  4. Retention & Culture Alignment Plan – Ensuring people continuity.
  5. Escrow & Earnout Monitoring Checklist – For legal and financial oversight.

Merit Investment Bank as a leading boutique investment bank is focused on entrepreneurial middle-market companies. Merit Investment Bank Executes sell-side M&A, buy-side M&A, and capital advisory services, debt and equity capital raises, corporate finance, and valuation services.

Securities offered through Finalis Securities LLC Member FINRA/SIPC. Merit Investment Bank and Finalis Securities LLC are separate, unaffiliated entities.

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