When the owners of a precision cutting tools manufacturer decided it was time to sell, they turned to Calder Capital’s Sell-Side Team. This case study details how our team delivered an exceptional outcome through a targeted and competitive sale process.
Valuation Summary
Prior to engaging with the client, Calder performed an in-depth valuation analysis to establish a market-informed valuation range for the company. As part of that analysis, our team identified 12 transactions involving comparable niche manufacturing businesses. Those transactions traded at an average EBITDA multiple of 4.60x. In fact, no comparable transaction exceeded 5.32x. Based on market data, company performance, and prevailing buyer demand, Calder’s analysis estimated a transaction value of approximately $5.82 million, with a market-leading outcome expected to reach as high as $6.45 million in total gross proceeds.
At the time of valuation, the Precision Cutting Tools Manufacturer had an adjusted EBITDA of approximately $1.05 million. By the time the business was sold, the 4-year EBITDA average was $975,000.
Background & Deal Summary
Calder Capital’s Sell-Side team ran a disciplined and competitive sale process that generated swift results. The Company was launched to market in December, an LOI was accepted by March, and the transaction closed in July, less than seven months from market launch to closing.
The results of confidentially, yet aggressively marketing the business were:
- 282 buyers expressed interest in reviewing the business.
- 225 buyers returned confidentiality agreements and were approved to receive the CIM.
- 14 buyers submitted offers.
Top three offers received:
- $5,250,000-$5,750,000 offer, $5,000,000 cash at closing, with a $250,000-$750,000 earn-out.
- $5,890,000 offer, $4,890,000 cash at closing, $700,000 seller’s note
- $6,000,000 offer, $5,700,000 cash at closing, $300,000 seller note
Our client accepted the $5,890,000 offer, and the earnings multiple for this sale was 6.04x EBITDA, based on the 4-year EBITDA average.
Why Work With Calder’s Sell-Side Team?
The marketing effort included researching both strategic and financial acquirers, confidentially promoting the opportunity through several M&A marketplaces and Calder’s website (which attracts between 20,000 and 50,000 monthly visitors, primarily buyers), promoting the opportunity to Calder’s network of more than 400,000 buyers, professional advisors, and business owners, and conducting direct outreach through targeted emails, text messages, and phone calls to prospective buyers whose acquisition criteria aligned with the opportunity.
The purpose of this case study is to illustrate the value of a competitive, limited-auction sale process. In this transaction, the eventual buyer offering the strongest all-cash proposal did not emerge from a traditional researched buyer list. Had the sale process relied solely on targeted outreach, the seller would likely have missed the best available outcome.
Instead, a broad and coordinated marketing effort created meaningful buyer competition, resulting in stronger offers, improved deal terms, and greater optionality for the seller. As this case study demonstrates, when multiple qualified buyers compete for an opportunity, sellers are far more likely to achieve an optimal result.
This disciplined, market-driven approach is the foundation of Calder Capital’s sell-side process and is utilized in every client engagement.
About Calder Capital:
Founded in 2013, Calder Capital is a cross-industry mergers and acquisitions advisory firm with offices across the United States. Calder provides valuation, sell-side, and buy-side services. We are nationally recognized for excellence in advising $1-100M enterprise value transactions in manufacturing, construction, distribution, and business services. Calder serves business owners, entrepreneurs, family offices, financial buyers, and investors. Learn more at www.CalderGR.com.
Notice: Calder Capital, LLC is not affiliated with any similarly named organizations or entities. To verify communications from our firm, visit our website or contact [email protected].