Tips & Strategies Before Selling a Business

Finding a Fit for the Family Business

The CEO of a family business, had a sixty-plus-year legacy and knew he needed to make a change. That’s the gist of an interview with Mike Richmond, Managing Director at DAK, with Emily Sackett, Senior Marketing Manager at Axial, recently published on Axial Forum. From the page:
When it was time for Craftmaster Hardware, a third generation business, to once again pass hands, the current owner, Michael Spingeld considered what no one in the family had before: selling to a private equity firm.

Statistics tell us that the likelihood of private businesses remaining family-owned decreases with each generation. The Craftmaster story is a perfect example of why this phenomenon occurs.

“We’re seeing an interesting bifurcation of sellers right now,” explained Mike Richmond, Managing Director at DAK, the investment bank that helped Spingeld find the right buyer for Craftmaster. “On one hand you have sellers on the older end of the spectrum hanging on to their businesses, because they don’t have any place to invest the money they would receive from selling.” Spingeld is one example of the other side of the equation: younger sellers in their early and mid 50s with the desire to take their success and earnings gained from exiting their business and apply it to a new venture or passionate pursuit.

Three Generations of Growth

Craftmaster’s roots date back over 60 years, when founder Jules Austin (and Spingeld’s grandfather) opened with the intention to provide general hardware to customers in lower Manhattan. Even in a crowded market, Austin succeeded in building a competitive position as a preferred provider of physical security hardware (locks, bolts, keys, etc.) to customers throughout the region. Under his ownership, Craftmaster achieved status as a fully operational small-batch locksmith supplier with well under $1 million in sales.

Two generations later, Spingeld (who had taken the reigns after his father-in-law carried on Austin’s vision for Craftmaster as a small business) began to broach an entirely new market.

Realizing the decline of the locksmith industry in local Manhattan and with a desire to become a true business-to-business enterprise, Spingeld evolved Craftmaster from a provider of hardware, to the experts in design, installation, upkeep and emergency replacement and repair of speciality locks.

(Read the whole article by clicking here (offsite link))

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VCI – Emergency Vehicle Specialists recapitalized by Tightrope Capital & NewSpring Capital

VCI is the preeminent full lifecycle sales and service provider of emergency ambulance solutions to first aid squads, EMS organizations, fire departments, hospital organizations, municipalities, and private medical transport companies in the Mid-Atlantic Region. VCI was recapitalized by private equity firms Tightrope Capital Partners and NewSpring Capital.

DAK led a competitive, sell-side process for VCI, generating multiple offers from a wide range of strategic buyers and financial sponsors. By positioning the combination of VCI’s market leadership position, comprehensive services offering, strong manufacturer relationships, and robust backlog, DAK achieved an outstanding outcome for the company’s shareholders.

The acquisition provides the shareholders of VCI an opportunity to accelerate its growth strategy by expanding its core ambulance business, building out the value-added segments of conversions and remounts, implementing operational improvements, and pursuing acquisitions with the help of its new partners. Tightrope and NewSpring have an opportunity to leverage VCI’s strong management team and operating platform to build a multi-regional player in emergency ambulance solutions.

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