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Success Stories

Seller:        Advanced Lighting and Production Services, Inc. (ALPS)

Sold To:     4Wall Entertainment, Inc.

ALPS is New England’s premier provider of commercial lighting solutions for theatres, schools and event planners.  ALPS provides state of the art rental equipment for events as well as designing and installing permanent lighting for a variety of entertainment venues.

What made the business attractive to buyers?
  • Recognized leader in the entertainment lighting industry for nearly 30 years in the Boston area, a challenging market for national competitors to enter.
  • Long term relationships with marque clients including: performing arts companies, production companies, educational institutions and event planners.
  • A team of lighting designers and production professionals with 10-20 years of service with the company.
  • An owner who is a nationally known expert in the industry.
Challenges:
  • Company had no plans to sell before being approached.
  • Low to moderate growth in the years prior to sale.
  • Company lacked successful outbound sales process.
  • Shareholders purchased a new building in 2016, the financing of which required owner occupancy.
When did Beacon first meet the owner?

Beacon was introduced to the company by their attorney after the owners sought his advice when they were approached by a large national competitor who had completed several similar acquisitions over the previous two years.   

How did the Company respond to the unsolicited inquiry?

First Beacon worked with management to educate them on their options. Next, Beacon prepared an overview information package to provide the Buyer with a financial summary and highlight key attributes while protecting confidential information. Beacon also identified for the Buyer several areas where cost savings related to a merger and one-time expenses related to the facilities move would improve the financial picture going forward, making the deal more attractive.

Why did the Owner decide to sell?

The majority shareholder decided a sale was the best path as he realized the national company brought resources the Company lacked. Since the two minority shareholders had previously planned their retirement dates within twelve months,  a merger gave the remaining shareholder an immediate management team to replace the departing co-owners.  All of the shareholders decided the merger worked economically for them and for the long-term future of the business.

How did the building situation complicate the potential transaction?

Since the owners had not contemplated a sale of the business when they purchased the building, they agreed to SBA financing that provided a larger loan to value but required the Company be the primary tenant. 

The large national bank was uncooperative in transitioning the financing from an owner-occupied SBA loan to an investment real estate loan.  Beacon tapped into our network of bank contacts to find a responsive local lender willing to provide sufficient terms to enable the sellers to move forward with the transaction.

Beacon’s Role and Successful Results:

Beacon Equity Advisors assisted with the market analysis, marketing package, deal negotiations and due diligence necessary to bring about a deal with a buyer based in Las Vegas, owned by a New York based private equity firm with a CFO in Texas, and a due diligence team from a national CPA firm based in Chicago.

The Process:

Beacon worked with the Seller to vet the Buyer and prepare a package of information to gauge the buyer’s interest.  Since they had not been contemplating a sale, Beacon worked with the owners to determine an appropriate value range for the potential transaction.

The Buyer provided an initial offer toward the lower end of the acceptable range.  Beacon helped the Sellers craft a counteroffer which raised the gross and net value of the offer, provided for employment contracts and a long-term lease on the building to provide sufficient cash flow for the building mortgage.

In order to arrive at a mutual agreeable deal price, Beacon worked closely with Buyer and Seller to propose a structure which was tax efficient for the Corporation and its individual shareholders as well as meeting certain objectives of the private equity investors funding the Buyer. Value was carefully structured between purchase price, building lease and employment agreements.

Beacon worked with the company’s sole proprietor CPA through the extensive due diligence performed by a national CPA firm.

Beacon worked with Seller’s counsel to ensure legal agreements between Buyer and Seller, as well as lender and Realty Trust reflected the negotiated agreements and satisfied the needs of the various constituencies.

The final transaction reflected an attractive multiple of earnings and a long-term lease at market rates providing the owners with a cash exit and a bright future for the business, its employees and stakeholders.