Metal manufacturing
Our client, in the machining industry, was constantly berated with daily problems requiring his immediate attention, to the point that he dreaded going into the office. Every single day he was faced with decisions regarding labor issues, vendor issues, equipment issues and more, to the point where it seemed to him as though the world were crashing down around him.
Our client, in the machining industry, was constantly berated with daily problems requiring his immediate attention, to the point that he dreaded going into the office. Every single day he was faced with decisions regarding labor issues, vendor issues, equipment issues and more, to the point where it seemed to him as though the world were crashing down around him. Some investments made in projects resulted in very little return. The company required significant business development investments that the owner simply did not have the resources or energy to fulfill. For all of these reasons, our client made the decision to sell the business.
Next Point met with our client and understood that the goal was to get out, growing the company to increase its enterprise value was not an option. After completing an enterprise value estimate of what the company could achieve on the market as a going concern, it was clear that the pieces would be more valuable than the whole. The real estate alone could be sold at a higher value than the company. The equipment could be sold at auction, and Next Point could search for a strategic buyer to sell the book of business.
Next Point conducted a targeted divestiture process and identified a strategic buyer for the company’s customer book, structuring an agreement that provided the owner with 10% of sales to those customers over five years. We also assisted with the orderly wind-down of the business, including collecting accounts receivable, paying outstanding obligations, and communicating the transition to employees, customers, vendors, lenders, and other stakeholders. Next Point helped evaluate equipment auction and brokerage alternatives and introduced a commercial real estate broker to market the property. By monetizing the customer relationships, business assets, and real estate separately, Next Point helped the owner pursue greater total value than a sale of the company as a going concern.
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