Client Situation
A group of investors interested in purchasing an industrial adhesive manufacturing company engaged HLB Gross Collins to provide due diligence and merger and acquisition advice. In June 2004, the investors purchased the company for $2.8 million. Sales were $3 million at the time of purchase.
What HLB Gross Collins Did
The new owners asked HLB Gross Collins to advise them on ways to make their acquisition more profitable. After a thorough analysis of the company, which had numerous financial and operational issues, the HLB Gross Collins team was able to add considerable value through recommendations which resulted in:
- Implementation of a new accounting platform
- Implementation of new inventory cost accounting and tracking software
- Training of team members on the new systems
- Implementation of new planning, budgeting and strategic initiatives
- Hiring of new sales personnel
- Hiring of new CEO
- Moving the facilities to a new manufacturing and warehouse location
Results
As a result of changes recommended by HLB Gross Collins, the company’s revenues grew to $15 million – a five-fold increase over 2003 revenues in under 30 months. In September 2006, the owners sold the company to a large Fortune 50 firm for an all-cash deal of $18.5 million – over five times its purchase price in 2004. From the company’s acquisition to its sale, HLB Gross Collins teams assisted with critical decisions and added value across functional areas of tax, audit, consulting and IT.
Also, as a result of HLB Gross Collins’ creative thought leadership and recommendations, the seller continued to own 10 percent of the new holding company, keeping experienced talent within the organization, and reaping the benefits of any increase in value.
For more information about how HLB Gross Collins can help your business, call us at
770-433-1711.
