Case Studies

Facilitating a Warehouse Business Sale Between Partners

J.S. Held Acquires GLI Advisors, Strengthening Our Construction Project Support Services in the Western US and Hawaii

Read More close Created with Sketch.
Home·Facilitating a Warehouse Business Sale Between Partners

The Situation

A $3 million Cocoa Warehousing Operation. $9 million debt. The company is a 50% owner of a cocoa-melting processor. The company invested in expanding the melting business to provide a Cocoa Deodorizing Process. Partner initiated the process to buy out Lyons & Sons in Cocoa Services. Our experts were hired to represent the Company’s interest in the negotiations.

  • Annual revenue was $2.5 million, with EBITDA of $0.5 million, and current Debt of $9 million to a secured lender and $7 million to ownership.
  • A new deodorizing business was intended to increase sales and profits dramatically, thereby covering debt service.
  • The company was in the process of refinancing when the partner requested the buyout.

How We Advised

  • Assisted with contentious negotiations as partners don’t trust each other.
  • The company’s new operations are only 3 months old, so it is difficult to project the full impact of the new business.
  • The heavy debt load made a valuation difficult.
  • The partner was only willing to negotiate through an attorney.
  • Valued the company based on the growth of new business.
  • Our experts realized large profits thanks to the new business's high gross margins.
  • The client was willing to buy or sell their ownership position, while the partner wanted only to own, which was an advantage in the negotiations.
  • Used the rules of the Partner’s Operating Agreement to our advantage in the negotiations, allowing us to always be one step ahead.
  • Increased the original offer of $1.8 million to $5 million.

Key Contact

Dan F. Dooley, CTP 
Senior Managing Director 
Strategic Advisory Practice 
+1 603 660 8952 
[email protected] 

Related Practice Areas

> Turnaround and Restructuring Services 
Navigating the many challenges confronting a company in transition requires an operationally focused approach that looks beyond the balance sheet to minimize further degradation and build a path to sustainable growth. Drawing upon decades of experience in the turnaround space, we help companies in transition identify practical strategies to improve profitability and liquidity for immediate relief, while concurrently developing and executing a comprehensive turnaround plan for long-term, sustainable value creation. 

 

> Solutions for Distressed Situations 
We deliver integrated solutions for distressed and insolvent businesses that maximize recovery, mitigate risk, and restore enterprise value. Our experts are retained to help distressed organizations stabilize operations, protect stakeholder interests, and execute turnaround strategies. We take an operationally-focused approach that looks beyond the balance sheet to minimize further degradation and build a path to sustainable growth. 

Our Experts