This case study by Calder Capital highlights how an effective marketing approach led to remarkable sales success for a niche restoration service company.

TTM EBITDA of the Restoration Company at the time of sale: $9,560,000

Results after confidentially, yet aggressively marketing the business:

• 195 buyers returned confidentiality agreements and were approved to receive the CIM.
• 18 buyers submitted indications of interest (IOIs)
• 7 buyers submitted letters of intent (LOIs)

Top three offers received for 70% of the business:

• $80,000,000 offer: $70,400,000 cash at close, $9,600,000 equity rollover
• $75,000,000 offer: $61,800,000 cash at close, $13,200,000 equity rollover
• $75,000,000 offer: $51,000,000 cash at close, $15,000,000 seller note, $9,000,000 equity rollover

Our client accepted the $75,000,000 offer. 

The earnings multiple for this sale was 11.21x EBITDA.  Prior to engaging with the client, Calder conducted a thorough valuation analysis that included identifying 11 similarly-sized sold comparables in the restoration industry. The average EBITDA multiple across those comparables was 4.39x. In fact, no comparable transaction exceeded 7x. Additionally, Calder identified 4 “for-sale” comps prior to the transaction. The average asking price multiple was 4.53x and the top asking price multiple was 5.0x. 

The Calder Capital team orchestrated a robust and efficient process, launching this Business to the market on October 28th, 107 days later on February 11th, the seller accepted a Letter of Intent (LOI). Approximately 8 months after the Company’s initial launch, the transaction was successfully concluded on July 14. It is important to note that the Company experienced some level of sales/earnings volatility over recent years and the explanation of that as well as future projections required significant time with potential buyers..

The marketing process included strategic and financial buyer research, confidentially marketing the business across 12 M&A listing sites and Calder’s website (which receives 18,000 visitors per month – mostly buyers), a broad database blast to 185,000 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:

Calder Capital, LLC is a lower middle market investment bank providing mergers and acquisitions advisory services to business owners, entrepreneurs, family offices, and investors across the United States. Our dedicated team of professionals combines extensive industry experience, technological innovation, negotiation savvy, and key relationships to exhibit exceptional execution. Calder’s services include mergers and acquisitions advisory, private funds and capital markets advisory, and business valuations.