Building Corporate Value in Action

FOOD MANUFACTURER
Leadership, direction, results
Owners of a food manufacturing company came to R. E. Pinard & Co. on the advice of their CPA, who suspected that an unsolicited offer in the mid seven figures from a strategic buyer was low, based on the company's high earnings. The company sold a limited and unique product line to 31 of the 50 largest retail outlet chains in the United States. R. E. Pinard performed a valuation that showed the company was worth about two-and-a-half times the unsolicited offer. At this value, the owners were interested in selling if a qualified buyer could be located.

R. E. Pinard prepared a memorandum of the business, marketed the opportunity and received three offers, from both strategic and financial buyers, all within 10 percent of the derived value. While the prospects delayed, wondering if the company's earnings were sustainable, R. E. Pinard met with the owners who agreed to execute their growth strategy, as outlined in the memorandum, in order to increase the value of their business.

Strategic growth initiatives
They invested a limited amount of capital into plant and production expansion, increasing capacity by about 50 percent. R. E. Pinard assisted in an executive search to locate a key person with national sales experience to replace one of the owners who would be leaving the business at the time of sale. Sales increased, production expanded and profits hit record levels.

Fivefold increase in value
Just 10 months after the first round of offers, the business was sold for five times the original unsolicited offer. None of the initial prospects were in the running during this second round. All were disappointed they had not bought the business when it was first offered at half the price, but the company's owners were delighted with the sizeable increase in their company's realized value.

MACHINING COMPANY
New market enhances company's value
The owner of a machining company, with a long-time relationship with R. E. Pinard & Co., expressed interest in selling the company due to a highly competitive environment and low margins. The company was focused on contract manufacturing in a crowded market. R. E. Pinard conducted a valuation which determined a current value in the low seven figures. The owner required a higher price in order to achieve financial independence.

Realigned target market
Working with the owner, R. E. Pinard assessed the company's abilities and determined that their abilities could be employed more profitably by focusing on a totally different market. Over the course of 24 months, the company aggressively sought work in this newly identified market. The company was so successful that the owner began consulting with international companies in product design and engineering new products that reduced manufacturing costs.

Surging profits enhance value
The company's creativity was rewarded with orders that doubled the company's sales volume. Profits surged and the company was sold for twice the original valuation. The owner continued to consult with the new owners and, most importantly, gained financial freedom, which now allows him to spend generous amounts of time pursuing matters of personal interest.

FABRICATED METAL COMPANY
Developing a successful exit strategy
For over two decades, the owner of a well-respected metal fabricating company built his company into a sizeable, successful and profitable operation. Over the years, he offered many employees the opportunity to invest in the company. Many did and shared in his prosperity.

Fair and equitable treatment
While the owner was satisfied with the performance of the company, he had difficulty implementing an exit strategy that would take care of his priorities: his family, fellow shareholders and employees. He wanted to treat all parties fairly and equitably, currently and in the future.

Over a number of years, he had worked with capable advisors of various sorts in piecing together an exit strategy. The missing ingredient was someone with the ability to provide the creativity, leadership and focus to execute the strategy, and who could also teach and counsel all parties that held a vested interest.

Staged exit strategy
R. E. Pinard & Co. assumed this leadership role, first conducting an in-depth Value Assessment of the company. Parallel to this, a staged exit strategy and plan of implementation were developed. R. E. Pinard took responsibility for executing the plan, working as the hub of legal, financial, and advisory activity. Key to the success of moving the plan forward was keeping everyone regularly informed as to the progress of the plan. The financial and legal issues involved in this staged exit plan were complex. Working with the company's various advisors,
R. E. Pinard & Co. managed, negotiated and implemented all aspects of the strategy, which allowed management to remain focused on running the business.

Today, the majority and minority shareholders continue to execute a transition plan that ensures all parties are treated fairly, keeping everyone's best interest at the forefront of every decision and action.

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