Beacon’s client is a leader in installing automotive accessories such as remote starters, heated leather seats, navigation systems and moon-roofs at the dealer to upgrade the vehicle before it is sold to the customer.
Every car has accessories and every owner has their style preferences: heated/cooled leather seats, a power moon roof, a navigation system, remote start capability, an anti-theft device, or a drop down DVD player. Customization is the American way. The company enables a dealer to enhance a basic level vehicle with just the upgrade options a buyer desires, often the very next day to avoid any delay in the dealer closing the sale and enables the upgrades to be rolled into a purchase loan.
The owner started the business just out of college. He designed a kill switch for his father’s auto dealership to prevent theft of the vehicles on the lot. Demand for the product grew as customers requested the switch be left on the vehicle after purchase. The owner was inspired to grow the business by selling the device to other car dealers. Over time he added other electronic products that the company could install for the dealers. Twenty years later the business had a team of 53 employees servicing over 100 dealers in New England.
After 25 years he thought the business needed new blood and a stronger management team to continue to grow. Adding additional geographic territories would require more time than he was willing to devote at this stage of his career.
Beacon Equity Advisors assisted with the valuation, marketing, deal negotiations and due diligence necessary to bring about a deal that allowed the business owner to move on to other activities, remain on the board of the company, and enjoy an upside potential as the business grew under its new leadership. Exactly the deal the owner of this business desired.
Beacon marketed the business for approximately nine months to identify private equity firms with the vision to duplicate the successful business model in other areas of the country.
Owner was able to choose between a nearly all cash offer from one buyer and a second offer that had less cash, but higher total payout and future upside from a buyer who shared the owner’s vision for expanding the business.
The business was sold for the target price and terms Beacon outlined for the owner prior to the start of the engagement.