A family owned business with a passion for the artistry, design, quality, and integrity of its products was approached by a public company interested in acquiring the business. How could the Rohl family be assured that the potential buyer would preserve their legacy and high standards? That was the challenge they brought to our team.
Background and Challenge
Rohl produces authentically crafted luxury faucets, fixtures and accessories for the kitchen and bath. The company’s special collections are created by craftsmen and artisans from Italy, France, Germany New Zealand and North America with a passion for artistry, design and quality.
While the shareholders had been discussing the timing of an eventual exit, they were not actively seeking to market the company. They hired us to assist them in vetting the buyer’s motivations. Once they were comfortable that the buyer’s intent and commitment to producing high quality products, the shareholders engaged us to help them maximize the purchase price, negotiate key transaction terms, and assist them through due diligence to closing.
But there was a challenge. The shareholders did not want to expose the Company to a wider buyer pool due to concerns about disruption to the business and the potential reaction of their showroom customers and employees if rumors began to circulate. At the same time, the shareholders were seeking a premium valuation that reflected 37 years of building a luxury brand, while specifically not fostering an auction or a competitive process.
The Challenge Met
We approached the family’s goals with an understanding of the human factors that are at the heart of discerning and expressing the value inherent in a business. After developing a rapport with the buyer, we wrote the interested company’s CEO a respectful, pointed letter setting forth all of the reasons that the family expected a premium valuation so that they would not feel compelled to take the company to market. After receiving the initial offer, we wrote a follow up letter to the CEO that expressed gratitude for the offer, and all of the reasons that the offer was insufficient to prevent the sellers from courting other suitors. After several rounds of negotiation, the parties settled on a valuation that the buyers could live with, and the sellers felt captured the value that they had created over many years.
Following a 60-day diligence period, the transaction closed at the agreed upon price with minimal escrows, and commitments from the buyer on post transaction leadership and brand management. Our efforts helped significantly enhance the initial offer, helped the Company through due diligence with minimal disruption, and led to an overall outcome that far exceeded the sellers expectations.
Skillful negotiation by an investment banker, supported by relevant data and solid analysis, can significantly improve a transaction’s outcome even when the right buyer is already known and the company is not actively marketed. The sale of a company is a complex, emotional process that is best undertaken with the guidance, advice, and experience of a trusted transaction advisor.
There are many possible outcomes to a transaction. Navigating the obstacles that can impede your goals is what we do. We’ll get you the right result.