Foodservice Equipment Manufacturer
Founded in 1926, this foodservice equipment manufacturer (the “Company”) had evolved into an extended family business that had reached its fourth generation of family members. The Company had become best known for its product lines of fryers and dough machines used by chain restaurants and foodservice operations.
As the third and fourth generation family members began to examine the business climate, they realized they were facing challenges that previous generations had not encountered. To begin with the facility was significantly larger than needed. Earlier generations had used this facility to manufacture all of the company products. However, sales volumes were now lower and manufacturing costs were high compared to competitors making similar products overseas. Faced with slowly declining sales and legacy costs of the family business, the owners knew that outside help would be needed to be able to continue the business and grow to the next level of success.
The management team and board of directors interviewed a number of investment banking organizations and selected Focus Capital Advisors based the strong financial skills of our team, references from previous clients and our knowledge of the industry that would enhance the marketing and negotiations of the transaction. The Income Statement and Balance Sheet had seen better days so the Focus Capital team made a thorough assessment of the off balance sheet assets such as the technology and very well-known brand in the cooking industry.
Using the Company brand, customers, and history as the valuable assets of the business, we created a confidential business profile that focused on these strengths and showed potential buyers the significant positive impact the brand and technology could have on the buyer’s business. Our industry contacts and research allowed us to develop a solid target list of over 100 industry targets that resulted in multiple offers and a sale to an excellent strategic fit at a price the family thought was very attractive.
The buyer leveraged the brand and technology to greater success and several members of the family management team remained active with the business post closing. This allowed the younger family to continue to promote the brand that has been in their family for generations. Also, by consolidating the manufacturing into the buyer’s facility, the family could cash out of their sizable real estate investment making the retiring members very happy. Today, they remain a solid referral source of new opportunities.