Thursday, July 24, 2008

Tuesday, December 18, 2007

 

The Client
Association Partners, Inc. (AP) was founded in 1997 by Mark Gehl shortly after a successful run in Corporate America. As a civic minded person, he became involved in his homeowner's association. Before long, he realized that there was a market opportunity in property management. Mark believed that the property manager should have a much broader vision than is often the case. The property management firm should be working toward increasing property values as their primary objective. The details of snow removal and lawn mowing were to him, minor aspects that must be properly executed as part of a larger plan. Surprisingly, the prevailing industry mindset is to simply execute the tasks.

Mark's business and family were growing concurrently. He was becoming increasingly dissatisfied with the trade-offs. The eventual decision was to sell the business in order to free up time for his avocation of working with the Boy Scouts of America.

The Assignment
As is often the case, the owner attempted to market the business on his own before contacting Joseph Associates International, Inc. (JAI). He experienced the usual problems such as knowing the true value of the business and dealing with industry buyers while attempting to protect confidentiality. Somewhat battered and bruised from his experience, Mark turned to JAI for professional help.

The Results
The first step in our brokerage process is a third-party valuation. Once our CPA learned more about AP, it became clear that this firm clearly out-performs its peer group. We documented that by upgrading our report from limited scope to comprehensive in order to include that peer group comparison. This direct comparison against RMA data for the property management industry enhanced value, marketability and our subsequent ability to attract financing.

JAI's BizTour^TM allowed prospective buyers to meet the owner virtually through streaming video. There were no site visits prior to the execution of the Letter of Intent. This eliminated a major concern about maintaining confidentiality as the employees often pass by or stop at the office during off-hours.

AP's new owner is Curtis Walker. He is a former banking executive from JP Morgan Chase. His avocation is rehabbing residential rental property. This first-hand involvement in property management led him to much the same idea as Mark Gehl's 1997 epiphany. Curtis had actually crafted a business plan for a start-up when he noticed our ad for AP. The sale closed on December 7th with financing arranged through Fifth Third Bank and Community South Bank.

Friday, July 07, 2006

 

The Client
Jeanne Hoesley was the owner and president of Lisle Mail & Business Services, Inc. Her business provided fulfillment of direct mailing services such as stuffing, labeling, applying postage, etc. Her retail location on Lisle IL's busy Ogden Avenue (US Rte. 34) was well chosen as it literally delivered customers to her doorstep. After ten years of success as an owner, she and her husband John wished to retire.

The Hoesley's son John is a principal of Prism Capital and a member of Midwest Business Brokers and Intermediaries. His parents asked him to find a broker to help them sell their firm. He directed them to Joseph Associates International, Inc. (JAI) upon the recommendation of Bill Wiersema CPA, a principal in the Northbrook accounting firm of Miller Cooper & Co. Ltd.

The Assignment
This business was an ideal entree into entrepreneurship for a first-time buyer. It was also a potential add-on for a printer or sign shop that could take advantage of the potential synergies available through cross-selling or vertical integration. JAI pursued a dual marketing approach. Ads were posted to attract first-time buyers while simultaneously approaching over 550 targeted firms in related industries by mailing them blind profiles of the business.

JAI's BizTour^TM marketing technique was used to great effect. The Biz Tour^TM supplements traditional documentation with streaming video clips delivered through a secure area of the JAI website. The videos featured a walking tour of the facilities and interviews with the owners. Prospective buyers benefited from the richness of information and instantaneous delivery upon qualification. The sellers were spared countless visits from tire-kickers who would not be ready to express serious interest without complete information. During the marketing phase, 54 confidentiality agreements were signed by interested buyers. The Biz Tour^TM method limited the initial buyer site visits to five serious candidates thereby limiting distractions for the owners and better protecting their confidentiality. Traditional book & spreadsheet marketing packages typically require twenty site visits to sell a business such as this one.

The Results
The eventual buyer of the Lisle Mail & Business Services was a first-time buyer, Mr. Dan Sepke. The transaction closed on May 8th, precisely nine months after the execution of the listing agreement. The Hoesleys are thrilled to begin their retirement following the transition period. They are also very comfortable knowing their loyal customers will be in Mr. Sepke's capable hands.

Tuesday, February 21, 2006

 

The Client
Jim Butler had directed franchising operations for Wendy's before deciding to start his own business. He had learned the power of the franchising concept first hand. Franchises strive for absolute consistency in operations. They achieve it by following a clear plan that is effectively communicated to its staff. While searching for a franchise to acquire, he had an epiphany reading a book. He read a one sentence plan that stated exactly how to clean a room. He ended his search for a franchise and founded Butler Domestic Services, Inc. in 1992. This one sentence became the mantra for Jim and his employees.

Butler Domestic Services, Inc. started with an initial focus on residential home cleaning services. Jim experienced more success in working with home builders and the direction shifted accordingly. Over the years, the business grew to its current staffing level of 50 employees. The customer list is a Who's Who of nationally known builders.

The Assignment
The business had established a long history of continuous growth and profitability. Jim had decided that if the business could be sold for a high enough price, he would like to transition into a less personally demanding life-style type business. He approached Joseph Associates International, Inc. (JAI) to determine the fair market value of his company through preparation of a third-party valuation. Upon receiving the completed report, he said he was "stunned". The value was substantially higher than he thought. He signed a listing agreement and challenged us to materialize the stated value.

The Results
Ed and Jackie Crowe were referred to JAI by Harris Bank's vice president, Roger Schnorr. They wanted to buy a business. Ed had started with Illinois Bell driving trucks and carrying a union card. After completing his degree at the University of Illinois, he worked his way up to Director of Sales and Operations Planning within SBC's Midwest region. Jackie is a graduate of DePaul University. She had been an auditor for the USDA before putting her career on hold to be a mom.

Both Ed and Jackie completed JAI's Credentialing® process and subsequently attended the "How to Buy a Business Seminar" held in May. They then opted for a Wolf Pack^TM search. The search process yielded multiple opportunities. The first resulted in a term sheet; the second in a Letter of Intent. Neither deal went to fruition as both owners perceived a higher value than our analysis could support. Disappointing interim financials were a factor in both cases.

The collapse of the second deal followed closely after the execution of JAI's listing agreement with Jim Butler. Ed and Jackie were immediately introduced to Jim over pizza and they agreed to move forward with a deal. Their decision to join the Wolf Pack^TM positioned them to be the only buyers who ever got to see this opportunity. A positive surprise in business performance was addressed with an updated valuation report that was used to support the financing proposal.

SBA financing was arranged through Mary Los of Fifth Third Bank, a JAI seminar sponsor. Ed and Jackie received legal assistance from Bill Wentz, Markus May and Leonard Fischer. Accounting due diligence was performed by Bill Wiersema of Miller, Cooper & Co., Ltd. All these professionals are regular presenters at JAI's "How to Buy a Business" seminar. Mary Los was supported by Bob Vallandingham and Joe Finnegan from Fifth Third's Aurora offices. They are both seminar "alumni".

Monday, February 20, 2006

 

The Client
Praxis Illinois Inc. was created and grown around the idea of a better blade for grinding tree stumps. The concept expanded to manufacturing the stump grinding machines. The value of the improved blade design was reinforced through successful patent filings in the United States and overseas. Bob Hooser and his brother Steve developed the business into a size that justified moving into a 25,000 ft² facility in DeKalb.

The brothers had begun this enterprise at a relatively young age. Both eventually elected to pursue other interests. Bob decided to sell about a year after purchasing his brother’s shares in the company so that he could focus his attention towards real estate development.

The Assignment
The business was established in 1992 and grew rapidly until plateauing ten years later. The manufacturing process was well established as that was Bob’s real strength. He recognized that sales and marketing would be the key to the next level of success. Bob concluded that he would rather pursue his dream of real estate development than attempt to step out of his strong suit of manufacturing into his weak suit of sales and marketing.

The Results
Jim Cornelius was referred to JAI by Bill Wiersema, a senior partner in the Northbrook based accounting firm of Miller Cooper & Co. Ltd. Jim holds an accounting degree from DePaul University and amassed nearly twenty years of experience in the corporate world. His work assignments were primarily focused in the manufacturing sector where achieved the position of Chief Financial Officer for a Swiss owned firm.

Jim signed up for JAI's Credentialing® process in June 2005. The program includes our "How to Buy a Business Seminar" in both live and DVD formats. Armed with his new-found knowledge, Jim set out to find a business to buy. He was quick to respond when Praxis Illinois, Inc. went on the market.

Bob Hooser chose Markus May as his attorney. Markus is an MBBI member and presenter at the JAI "How to Buy a Business Seminar". SBA financing was arranged through Mike Jannusch of Amcore Bank in Naperville. Mike is an active member of the Naperville Chamber of Commerce and can usually be found at its meetings of the Young Professionals Network.

Joseph Associates International was able to utilize a number of its unique capabilities to promote this opportunity to both active and passive potential buyers. In order to ensure the owner would receive the full market value for his company, JAI contacted over 500 companies throughout the midwest in addition to using the more traditional promotional methods. Additionally, JAI filmed, produced and made available in streaming web format over 30 minutes of video that detailed the entire Praxis Illinois product line, provided a walking tour of the production facility and concluded with a comprehensive interview with the owner. Click here for a short example of one of the videos in low resolution. Providing this information in video format is essential in making sure that the buyers are being presented with the most useful and compelling information possible. Click here for the full press release.