A $17 million in revenue consumer products company had the opportunity to purchase a US Manufacturer within a new segment of the same industry. There were several things that made this purchase attractive from a strategic viewpoint:
Chris Legler helped the company negotiate the purchase with a 100% seller-financed deal allowing for contingencies for several challenges that the purchase provided. The seller financed deal allowed the acquiring company to maintain its current capital so that existing operations could continue to grow. In addition to negotiating the purchase, we developed a due diligence checklist and also a plan for the first 100 days after acquisition. We also worked with the sales team to develop new goals and objectives around the new company.
In the first year of operation, the company grew sales by 57%. The results affected three primary areas: The company doubled the footprint of the largest customer and therefore increased sales by 74% for this customer through new marketing, packaging and adding a private label brand. Approximately 20% of the increase was attributable to customers that the acquiring company already had. Through previous relationships, the company was able to acquire additional major customers that comprised another 20% of the increase. In addition to the increase in sales, the company was able to reduce the workforce by 44% by hiring a plant manager who focused on operational efficiencies. The company ended up acquiring 38% of the market share according to NPD data.