This Calder Capital case study outlines how Calder helped the owners of an Automation and Electrical Services Provider achieve an exceptional sale outcome.

Valuation Summary

Prior to engaging with the client, Calder conducted a thorough valuation analysis that included identifying 10 similarly-sized sold comparables in the electrical services industry. The average EBITDA multiple across those comparables was 4.60x. In fact, no comparable transaction exceeded 5.28x. Adjusted EBITDA of the Automation and Electrical Services Provider at the time of valuation was $1,830,000, and the 4-year adjusted EBITDA average was $1,850,000. Calder’s valuation analysis estimated total gross proceeds of the business in this transaction as $7.8M, conservatively to $8.6M, as a market-high sale.

Background & Deal Summary

The Calder Capital Sell-Side team orchestrated a robust and efficient process, starting the engagement in January and launching this Business to the market in April. In May, the seller accepted a Letter of Intent (LOI). In 4 months after the Company’s initial launch, the transaction was successfully concluded in July.

Results after aggressively, yet confidentially marketing the business:

• 97 buyers expressed interest in reviewing the business.
• 92 buyers returned confidentiality agreements and were approved to receive the CIM.
• 14 buyers submitted offers.

Top three offers received: 

• $11,000,000 offer, 70% cash at closing, 20% equity roll, and 10% seller-financing over 5 years
• $11,000,000 offer, 91% cash at closing, 9% equity roll
• $11,500,000 offer, 80% cash at closing, 20% equity roll

Our client accepted the $11,500,000 offer, and the earnings multiple for this sale was 6.21x EBITDA when calculating from the 4-year adjusted EBITDA average.

Why Work With Calder’s Sell-Side Team?

The marketing process included strategic and financial buyer research, confidentially marketing the business across several M&A listing sites and Calder’s website (which receives 20,000-50,000 visitors per month – mostly buyers), a broad database blast to 400,000+ buyers, professional advisors, and business owners, and targeted emails, texts, and phone calls to buyers with specific matching criteria.

The purpose of this case study is to demonstrate that a robust limited auction-style sale process will generally yield the best possible result. Most firms rely exclusively on a researched buyer list. If we had utilized only this method, we would have failed to bring the top cash buyer.

Aggressive, coordinated marketing is the only way to ensure the best price, structure, and fit, as evidenced by this case study. When buyers compete, the best proposal rises to the top and the seller receives the best price and terms. This is the process that Calder Capital follows with every client.

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].