Joseph Associates International, Inc. has been retained to identify and develop strategic options for a premier distributor of plumbing supplies and cabinets in the Chicago market.  Since being acquired in 1998 by the current owner, revenues have soared from about $1 million/yr to a peak of $47 million in 2007.  This growth resulted from the owner’s single-minded focus on customer satisfaction in both service and competitive pricing.  Although revenues have dropped as a result of the economic downturn, profitability has been maintained and a credit facility was recently opened with a new senior lender.


As can be seen in the graph below, growth has come with relatively low margins.  Management believes that the current economic situation affords a great opportunity to expand both its market share and margins through acquisition.  The cabinet division recently closed on the acquisition of a small manufacturer (custom cabinets and tops).  This entity has WBE status which will be leveraged across all products lines.  The plumbing business shares market leadership with a few other companies which comprise our primary target list for subsequent acquisitions.  The first target is our client’s closest and would be a “fold-in”.  Management believes they can achieve $1 million in overhead reduction.  The target has already been contacted. This second phase has senior lender backing but will require also require private equity support.

Questions? Contact:

Joe McCaul

Phone: 312-212-8046

jmccaul@BrokerChicago.com

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HIGHLIGHTS

  1. BulletA decade of rapid growth and profitability.  Owner has set a $150 million revenue target for 2014.

  2. Bullet80,000 ft2 warehouse with ideal location due to opening of a new section of an interstate highway

  3. BulletJust closed on first acquisition

  4. BulletOpportunities for continued high growth through acquisitions of targets already identified and /or engaged.

The owner would like to lead the company to $150 million in revenue and much higher value in the years remaining before his retirement.  Bet the jockey or bet the horse?  Our client’s track record is extraordinary.  There is a strong management team in place for the plumbing supplies business and the planned acquisitions will bring further depth.  Great jockey bet!  Leading indicators now signal a bottom has been found in the housing market making this a potential barn-burner of a horse bet as well.


A strategic partner is sought who might provide the resources needed to materialize this growth strategy.

Michael D. Weis, JD, CPA Williams, Bax & Saltzman

LaSalle Wacker Building

221 N LaSalle

Suite 3700

Chicago, IL 60601

312.372.3311

weis@wbs-law.com