The majority of sellers within the lower middle market only go through the sale process once in their lifetimes. Sellers often hire an M&A expert to help guide them through the sale process and advocate on their behalf. While M&A experts have a wealth of experience, they do not have a crystal ball.

Benchmark International successfully facilitated the transaction between Flowstate Branding and Decision Sciences Research Associates.

Benchmark International is pleased to announce the acquisition of Bradford-based Prima Yorkshire to Scarborough-based Duraweld.

Prima Yorkshire is a manufacturer of bespoke packaging solutions for retail products, storage, and stationery, providing a complete design and manufacture service using materials including PVC, corrugates, boards, and papers.

Established over 60 years ago, Duraweld employs around 50 staff and designs and manufactures a wide range of packaging and stationery products for customers, working across sectors such as healthcare and retail.

The acquisition of Prima Yorkshire by Duraweld is an excellent strategic fit and will help the buyer expand its customer base. Duraweld is also set to benefit from the additional capability to auto die-cut and fold as well as glue cartons by way of Prima’s manufacturing capabilities.

Prima’s former owners are being retained as consultants to the business, and the company’s branding will be retained.

Benchmark International is pleased to announce the acquisition of Canterbury-based Herrington Consulting to Cambridge-based Environmental Protection Services (EPS).

Established in 2005, Herrington Consulting offers a comprehensive service offering with expertise across four areas: flood risk management, surface water and drainage management, daylight and sunlight impact assessments, and coastal engineering and risk management. Employing state-of-the-art computer modelling to unlock some of the most technically challenging sites the company has the ability to serve a range of clients including architects, local authorities, and housing developers.

Established 20 years ago, EPS has extensive experience through a diverse range of geotechnical and environmental consultancy projects for a diverse range of clients in the residential, retail, industrial and petrochemical sectors. The company offers a UK wide geographical coverage from its offices in Cambridge, Leeds, Bristol, and Glasgow.

Benchmark International has successfully facilitated a transaction between Illinois-based W. A. Imports and New York City-based Forever Cheese.

Benchmark International is pleased to announce the acquisition of KES Excavating, a Wisconsin company by Bug Tussel Wireless (Hilbert Communication), also a Wisconsin company.

Before completing a deal, buyers may conduct a variety of different research on a seller’s business to better understand its complexities of it prior to due diligence. This research is an important step to ensuring that due diligence is carried out. Business research occurs in a variety of different ways.

Benchmark International has successfully facilitated a transaction between New York City-based Cookie DO, Inc. and NeilEats.com, also based in New York City. Cookie DO is an innovator in the confectionery industry with a variety of unique, handmade flavors of edible and ready-to-bake cookie doughs. The company features an ever-growing product selection that includes its famous edible cookie dough, baked goods, baking classes, a proprietary cookbook, merchandise, cookie cakes, and baking mixes and flours.

In 2021 and early 2022, we saw record-breaking levels of M&A activity in the United States and around the world, and many business owners are wondering how long this cycle
will last.

The global artificial intelligence (AI) market was valued at $93.5 billion last year and is forecast to expand at a compound annual growth rate (CAGR) of 38.1% between 2022 and 2030. AI is proving to be a transformative factor in today’s digital era and is being applied in every area possible, from self-driving cars to life-saving medical equipment. The big tech giants continue to invest in research and innovation that is driving the adoption of advanced AI technologies in industry verticals, including healthcare, finance, automotive, retail, and manufacturing. AI offers better efficiency, and many companies are also adopting AI technology to offer better customer experiences.

In 2021, the global heating, ventilation, and air conditioning (HVAC) market was valued at $156.44 billion. The market is expected to be valued at $231.11 billion by 2027, expanding at a compound annual growth rate (CAGR) of 6.72% between 2022 and 2027.

Benchmark International's client, B. Carlson Heating & Air Conditioning, a provider of HVAC and Plumbing Services, has been acquired by Radiant Plumbing and Air Conditioning, a Texas-based portfolio company of The Riverside Company.

Benchmark International has successfully facilitated a transaction between Hialeah, Florida-based D.T. Woodcrafters Corp (“Woodcrafters”) and Hollywood Woodwork, Inc. (“Hollywood”), headquartered in Hollywood, Florida. Woodcrafters creates custom woodwork for a high-end customer base that includes banks, offices, restaurants, hotels, and homes. For over 25 years, the team’s craftsmanship has allowed it to distinguish itself in South Florida. Hollywood is one of the nation’s premier millwork and casework companies, with over 150 employees and a leading position in the Florida market.

One of our Managing Partners at Benchmark International drafted an exclusive publication detailing many of the attributes that are unique to strategic buyers and how those attributes can impact   business owners in the sale of their business. 

Benchmark is pleased to announce the transaction between Huco Consulting, Inc and Montrose Environmental Group, Inc. The reasons for targeting were strategic expansion and the added value that Huco would bring to the table.

Benchmark International is pleased to announce the acquisition of 6 Denver metro Jimmy John’s franchise restaurants, known as Rupp Enterprises, to a private investor.

Benchmark International successfully facilitated the transaction of Coastal Packaging and Lachemont Group. Coastal Packaging is a custom packaging and liner covers company offering turnkey, flexible packaging specializing in plain and printed roll stock for form fill and seal machines, open mouth bags, custom fit container liners, and pallet covers. They have flexible minimum runs, which is an advantage.

Benchmark International is pleased to announce the acquisition of ProMaxx Tool by Milton Industries.

Benchmark International successfully facilitated the transaction of Spatial Acuity, LLC, to Bowman Consulting Groups LTD, hereinafter referred to as Bowman. Spatial Acuity, LLC is headquartered in Austin, Texas. The company provides high-definition scanning, 3D modeling, and reality capture services for owners, developers, and operators of private and public infrastructure. Utilizing advanced geomatics equipment, Spatial Acuity delivers interactive, three-dimensional digital models, thrusting their clients to the forefront of the digital twin revolution.

Benchmark International successfully facilitated the sale of ProCon LLC, hereinafter referred to as ProCon, to Southwest Material Handling Inc. ProCon, headquartered in Las Cruces, New Mexico, is an award-winning exclusive dealer of JCB construction equipment and a provider of value-added service and parts. ProCon operates in the western region of the US, including Colorado, Arizona, New Mexico, Texas, and Nevada.

Benchmark International successfully facilitated the transaction of Seasons Home Health, which consists of a group of four entities. The entities provide personal home care to children, elderly, or disabled patients in Southern Texas. Located in the Rio Grande Valley, Seasons Home Health helps individuals in need of personal home care to live securely and comfortably in their own homes.

Benchmark International is pleased to announce the acquisition of Killaloe-headquartered Quantum 3 (Q3) by Michigan-based Burke Porter Group (BPG).

Established in 2000, Q3 manufactures a range of lean and flexible aluminium profile and framing systems, featuring patented connector blocks, for manufacturers in the medical and life sciences industries. Leveraging its unique modular flexible aluminium profile and framing systems, the company designs lean assembly and production line solutions that enable customers to optimise their workflows and realise process improvements in cleanroom and other demanding environments.

Over the last 20 years, Q3 has served clients in Ireland, the U.S. and Costa Rica.

Founded in 1953 and headquartered in Grand Rapids, Michigan, BPG is a leading global supplier of automated diagnostic, testing and production solutions serving life science and speciality industrial end markets. BPG focuses on automating high-precision processes, leveraging its capabilities in microfluidics, optical design, additive manufacturing, motion control and software to develop solutions tailored to its customers' needs.

BPG maintains close proximity to its worldwide customer base through a global footprint of 45 locations to provide responsive and local supply, service and support.

Following the acquisition, Q3 founders Pat Hayes and Paul McGrath will remain with the company, working closely with the BPG leadership team and Rich Carone, who leads BPG's Medical and Life Sciences Division.

Benchmark International successfully facilitated the transaction of Stria, LLC, to Bitwise Industries. Stria, LLC. The company works with key third-party platforms to provide classification-as-a-service (CaaS), content service platform support, workflow automation, document scanning, records management, and reprographics services.

What is Net Working Capital?

Introduction

Working capital also called net working capital, measures a company's financial security. According to Jensen and Meckling, authors of the new famous Theory of the Firm (1976), the components of working capital measure the firm's shareholder value. Working capital helps evaluate a company's short-term health, liquidity, and ability to invest and grow its operations. Working capital is defined as current assets less current liabilities. Current assets often include cash, accounts receivable, customer unpaid bills, and inventory, with current liabilities encompassing accounts payable and short-term debts, to name a few.

When it comes to selling your business, and you are considering waiting or pausing, there are several factors to consider, such as market conditions and interest rates. But there is also something called the denominator effect.  

Benchmark International is pleased to announce the acquisition of Lloyd Lauw Collision Repair Center to Gerber Collision & Glass.

Benchmark International successfully facilitated the transaction between Metro-Tech Electrical Contractors, Inc. and Michael Bowman.

The M&A Advisor announced the winners for its 13th Annual Emerging Leaders Awards, and Benchmark International's Global Creative and Brand Strategy Director, Brittney Zoeller, is among the winners.

Benchmark International is delighted to announce the acquisition of Exeter-based Dealtop T/A Dartline Coaches by Newcastle upon Tyne-based Go-Ahead.

Beginning with eight vehicles in 1987, Dartline has grown its operations over its 25 years of trading and now possesses 84 vehicles, employs 118 people, and provides a comprehensive range of transport services. In addition to coaches and buses, Dartline runs special education needs taxis.

Established in 1987, Go-Ahead is one of the UK’s leading public transport companies with operations in the UK, Ireland, Singapore, Norway, and Germany. Formerly listed on the London Stock Exchange, in 2022 it was purchased by Kinetic Group and Globalvia.

In the West Country, Go-Ahead has grown rapidly. From its origins as Plymouth Citybus, the group expanded into East Cornwall in 2014, and again in 2020 through an eight-year contract to deliver rural bus routes from Lands End to the Tamar for the county council, creating Go Cornwall Bus. The combined operation was given a new corporate identity as Go South West.

Following the acquisition, Go South West will operate 380 vehicles and employ 90 people under four customer-facing brands: Dartline, Go Cornwall Bus, Go Devon Bus and Plymouth Citybus.

Many individuals at large institutions that trade in the public markets are turning to private ownership and pursuing majority equity positions in lower middle-market companies and even creating their own funds. This public-to-private trend is partially being driven by current and expected public market volatility over the next few years, combined with individual business circumstances, all with the expectation for a brighter future. The recent stock market instability is presenting attractive opportunities for companies that may perform better in the private market. Private equity and private investors have ample capital available to them at a time when public market valuations are sinking. The interest is coming from both private equity funds and strategies, as private markets are gaining ground on public markets. Take-privates are on pace for the second year in a row at $100 billion or more in deal value. That is a first for the industry in more than a decade.

Benchmark International was awarded Corporate/Strategic Deal of the Year ($10MM - $25MM) for the transaction of Performance Equipment to Mid State Restoration in The M&A Advisor's 21st Annual M&A Advisor Awards.

Benchmark International was awarded Cross-Border Deal of the Year ($10MM - $25MM) for the sale of Summus Group to Sia Partners at The M&A Advisor’s 21^st Annual M&A Advisor Awards.

Benchmark International has been named Leading Specialist M&A Advisory Firm of the Year 2023 in the United Kingdom by Acquisition International's Leading Adviser Awards.

Benchmark International is pleased to announce the transaction between Chustz Surveying, a Louisiana-Based Surveying Company, and GIS Engineering, a professional service firm across five locations in Louisiana.

The seller, NMC Exteriors, is a Minneapolis, MN based residential and commercial roofing and siding provider with 20+ years serving homeowners and businesses in the greater Minneapolis area. NMC’s commitment to quality has propelled them to be a market leader in their community.  They have achieved an A+ accreditation from the Better Business Bureau and have been awarded the Platinum Preferred Contractor by Owens Corning.

Benchmark International has successfully facilitated a transaction between Florida-based Paramount Urgent Care, Inc. (“Paramount”) and HCA Healthcare, headquartered in Nashville, TN. Paramount operates six urgent care clinics in Central Florida, with locations in Clermont, The Villages, Oviedo, Orlando, Casselberry, and Windemere Villages. 

Benchmark International is pleased to announce the acquisition of Yorkshire-headquartered Shift Left by Sydney-headquartered Planit, for an undisclosed sum.

Shift Left provides specialist business and technology consultancy services, improving quality and reducing risk for clients by providing the strategies, solutions and advice needed to move quality earlier and throughout IT lifecycles of change. Working with clients throughout the UK and Europe, the company has a strong reputation in a niche industry with renowned blue-chip clients.

Planit is the leading provider of quality engineering solutions, consultancy, services, and training in the Asia Pacific region. The company enables businesses to deliver better software by providing the skills and solutions needed to improve the quality of their software and the way they deliver it.

Under the acquisition, Shift Left will continue to operate under its brand, with its co-founders David Rigler and Alan Upton leading Shift Left operations.

According to Managing Director, Mr. Rigler, the company’s partnership with Planit will enable Shift Left to continue its focus on providing a quality service to its customers by leveraging the scale and capability that Planit has within its existing operations.

How will running a competitive bid process help me?

The lower middle market remains very active, and we anticipate that this trend will continue for the foreseeable future. If you are a business owner, you have probably received unsolicited interest and perhaps even offers for your business. There is a lot of money chasing few deals, so buyers are looking to find off-market deals to build their pipeline and purchase a business below market value to boost their investors’ returns. Having additional buyers at the table tends only to benefit the seller.

When a buyer uncovers an off-market deal, they are often in a better position to buy the business at a discounted price than what they would pay in a formal auction or open bid process. Buyers seek acquisitions to help solve a problem or hit an ROI benchmark. If the buyer can purchase a business below market, then the buyer ends up winning both in the current transaction and future transactions. The business owner is the one who tends to have seller’s remorse. Our team commonly speaks with buyers who will not participate in auction processes because they do not want to pay top dollar, and those buyers know that they are not willing to do what it takes to win the bid.

If you have ever watched an episode of Shark Tank when all the sharks are bidding on an opportunity, you have seen how a competitive bid process can benefit the company pitching to the sharks. When Lori Greiner, Barbara Coroan, Robert Herjavec, Daymond John, Kevin O'Leary, or Mark Cuban share an interest in an opportunity, it often piques the interest of another shark who wants to jump in and try to win the bid. Sometimes, the sharks even go into the deal together. This process also happens for deals within the lower middle market. When two buyers go into a deal together, they are called co-investments. In this case, two can be better than one. However, you will not know if co-investments are an option until you go to market and run a process.

When a seller receives an offer from an unsolicited party, the offer only reflects one party’s view of the value of the business. Businesses are comprised of both tangible and intangible assets. That is, the value of the business lies not only in its tangible assets like machines and inventory but, perhaps more importantly, in the quality of its people, process, customer base, and intellectual property. Acquirers buy businesses for many reasons, including for geographic expansion, product line development, talent acquisition, and competitive advantages, to name a few. Why is a business worth 5x to one buyer but 7x to another? A business's real value is the opportunities an acquirer has post-closing. Ultimately, the only way to know if the offer in hand is a representation of the market or even the best option for the business owner is to explore multiple views of the value of the business.

If you move forward with the one offer available, what will you do if the deal falls apart during due diligence? Due diligence can be a time-consuming and overwhelming process. If you go through the due diligence process and the deal is unsuccessful, what? You will not have a second or third option. The sale process can be very emotional. Often, when a deal closing is not successful, a firm that ran a bid process will typically have a handful of bidders that they are able to re-engage to work toward a successful closing. The deal team can utilize the initial data request and due diligence process to make the workload lighter the second time around. An experienced M&A deal team will be able to craft a strategy to target active buyers from previous efforts and bring them back to the table. However, if you only have one option, you must start over from the beginning. By the time you start over, you are at risk of missing the market, which might cost you tens of millions of dollars.

The other great aspect of running a bid process is that you have leverage during due diligence. Typically, when a letter of intent is signed, the negotiation power shifts from the seller to the buyer. If you have other suitors waiting in the background, an experienced M&A deal team can use that competitive tension to help a seller secure the best deal on the market and keep the buyer in check. The buyer who ultimately wins a formal auction process knows that there were other suitors competing for the bid.

It is crucial for any seller considering a sale to hire a capable sell-side M&A firm to take them to market. A dedicated sell-side team virtually assures you that you will have multiple suitors and bids. You will be able to see several different views on the value of your business and be able to determine the optimal deal structure. The process will allow you to explore other partnerships and understand what competitive advantage various firms can bring to the table. If you compare the company sale process to dating, it is good to know what other suitors offer so you can pick the best one for you! Having an experienced M&A team take you to market to uncover your best options will give you the peace of mind that you have the information you need to make the best decision for you and your business.

  Author
  Kendall Stafford
  Managing Partner
  Benchmark International

  T: +1 512 347 2000
  E: STAFFORD@BENCHMARKINTL.COM

The seller, Impact Communications, is a Cleveland, OH-based full-service production company specializing in in-person and virtual event experiences, video production, museum and exhibits, and interactive applications. With over 40 years of providing services to some of the largest brands in the country, Impact Communications has established a stellar reputation for delivering quality projects.