Merger of two related firms pays dividends for owners (Voices)

 

 

 

 

 

 

 

 

 

 

 

 

By: Buzz Harris

I wanted to share the details surrounding a business transaction that occurred this past spring. It’s not the principals involved, nor is it the site of the transaction, that makes this business sale interesting.

Rather, the factors involved exemplify that it can be advantageous for an existing business to purchase another related business.

Ye Olde Printery was a profitable commercial print shop that had been in business since 1975.

It was not a high-volume business, but it was one that had three extremely attractive components:

• First, it had an outstanding reputation for quality work that was delivered in a timely fashion.

• Second, it had a long list of clients who had been doing business with Ye Old Printery for many years.

• Finally, the business had quality equipment that had been well-maintained.
Through our marketing efforts, we were able to identify a number of printers who could benefit from integrating this business into theirs.

In fact, two different printers made offers to purchase the business.

The company that ended up buying the business was another well-established company in Reno and a commercial printer with high quality standards and prominence in Northern Nevada.

The reason the buyer was interested in the acquisition is that it matched the components that the business had to offer.

Ye Olde Printery’s profitability, reputation, quality of work, clientele and equipment were all motivating factors. However, one more mitigating factor existed.

One of the key revenue streams Printing Associates has is a golf course tee time scheduling book. This is a propriety product which is produced locally but is marketed nationally.

Because of the seasonality of the golf industry throughout North America, the summer months are not quite as busy for Printing Associates compared with other times of the year. As a result, its press capability was not always at capacity.

Integrating Ye Old Printery’s business was viewed as a way to change that. However, the transaction did have its challenges along the way.

Because the owners were considering selling their business to someone in their industry, a significant amount of concern arose about keeping their identity and accounts confidential. Also, the legitimacy of the buyer’s motivation needed to be verified carefully.

The repercussions from a competitor finding out that Ye Old Printery was selling, and who was among its accounts, could have been disastrous to the seller.

Fortunately, as part of our process, we are able to manage the transfer of the necessary information in a manner that did not put Ye Old Printery at risk, while at the same time satisfying the needs of the buyer so that the owner could make a knowledgeable decision.

Buzz Harris is a Licensed Business Broker with The Liberty Group of Nevada. Contact him at BHarris@TheLibertyGroupofNevada.com.

 

 

https://www.nnbw.com/news/2022/oct/25/buzz-harris-merger-of-two-related-firms-pays-dividends-for-owners-voices/ 

 

 

 







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