One of the recent deals we closed was a $15 Million consumer products manufacturer in the southwest; the company specialized in home and garden decor – spinners and wind chimes were its primary product offerings. The company grew very rapidly and needed resources and infrastructure to continue its growth, so they engaged us to find a suitable partner.
We ended up obtaining approx. 10 offers for our client and with our client selected 4 of the strongest buyers to attend management meetings. Among the four buyers, our client selected a $200 Million manufacturer of pest control products owned by a $1.3 Billion Private Equity Group that has completed over 50 acquisitions.
If you looked at the websites of both companies, buyer and seller, it would have been a stretch to see the fit……manufacturer of pest control products purchasing a manufacturer of home and garden decor?? The only fit was that they were both consumer products manufacturers!
So why was the pest control manufacturer interested? A small but growing piece of their business was manufacturing home and garden decor.
How did we find this buyer?
1) On every engagement we deeply research the industry and put together a hot list of “likely” buyers for the particular company. Our hot list of “likely” buyers for this particular company totaled approx. 75 strategic buyers.
2) Additionally, as we never like to prejudge the “best buyer” upfront, we also confidentially contact many other strategic and financial buyers domestically and abroad.
The ultimate buyer was not on our hot list of 75 “likely” buyers, rather we contacted them along with the many other financial and strategic buyers domestically and abroad. In this particular case, it was actually our dealmaker in Europe that clued them into this opportunity (ultimate buyer was in the U.S.).
So did we know prior to marketing our client that the $200 Million pest control manufacturer was looking to grow their home decor business through acquisitions?
No, we’re not that smart……it was totally the result of being open minded and not limiting our marketing to the “most likely buyers.”
