Building Product Manufacturer.
Strategic Sale for Profitable Reinvestment
Selling a peripheral division to a strategic buyer allowed profitable reinvestment, enabling the owner to refocus on the company’s core business.
The Challenge
In the process of building and growing his building product manufacturing company, our client added divisions and product lines outside of his core business. While the owner remained optimistic about the potential of all of the company’s divisions, he ultimately realized that some were not as profitable as others and ultimately diluted the overall value of his company.
The resources, time and capital he was required to invest in the underperforming or non-core divisions evolved into a risk that was not worth the potential reward and the decision was made to reinvest the capital that could be realized through spinning off the peripheral divisions back into the core business.
Our Solution
Next Point executed the divestiture process to find a strategic buyer for the non-core division of the company. We built a business summary to describe the division, and the challenge was to separate the division from the company as a whole both financially and operationally so that a buyer understands the current picture as to why it may be under-performing but also realizes the potential the division could bring to their existing operation. Several letters of intent were presented to and evaluated with the owner.
The Turning Point
The division was sold to a strategic buyer, the profits were reinvested to grow the core company, and the owner was no longer distracted by the peripheral division.
Services Performed
