Seller:                  Neutra-Safe, Inc.

Sold To:               The Swan Group

The Company is the manufacturer of unique line of condensate neutralizers, neutralizing condensate pumps, and system feeders for the HVAC industry.  The products safeguard residential drains, sewers and septic systems as well as municipal treatment facilities from the acidic condensate produced by condensing boilers, water heaters and furnaces.

What made the business attractive to buyers?
  • Explosive revenue growth over the last five years
  • Unique and evolving product mix, including patented product
  • Strong Gross and Net Margins
  • Recognized brand in a growing green industry

  • Small management team running a fast-growing business  
  • No internal sales team, reliance on independent distributors for increasing product penetration
  • The innovative shareholder struggling to find time to focus on product development while dealing with daily management challenges.

When did Beacon first meet the owner?

Beacon was introduced by the company’s CPA and attorney when the shareholders had been approached by a large manufacturer looking to add to its product line.

Why did the Owner want to sell?

The owner was nearing 70 and enjoyed product development but was concerned he and his wife didn’t have the ability to manage a large manufacturing operation.  He believed the company had significant value and feared missing the opportunity to realize that value in cash for retirement.

Beacon’s Role and Successful Results:

Beacon Equity Advisors assisted with the valuation, marketing, deal negotiations and due diligence necessary to bring about a deal with a large holding company with manufacturing and distribution subsidiaries.

The Process:

Beacon worked with the buyer to determine the potential sale value of the company based on historical as well as projected financial performance.  The shareholders felt the potential value was sufficient to satisfy their long term financial needs.

Beacon marketed the business to multiple potential buyers with the greatest industry knowledge, the best opportunity to capitalize on the acquisition and the reputation sought by the seller.

Beacon prepared an initial presentation highlighting the Strengths, Successes and Synergies the Company brought to the table. The presentation also provided big picture financial information, including projections, and other key data to create interest and downplay perceived risks while maintaining seller confidentiality.  Beacon then worked closely with each buyer to answer their initial questions after reviewing the package.

Beacon encouraged each buyer to submit a timely indication of interest letter (IOI) with the goal of having the seller select the most attractive buyer for more detailed conversations over the following two weeks.

The top group, who was well known the shareholders, requested an in-person, near the end of the COVID pandemic.  Beacon worked with the shareholders to prepare them for the meeting and attended to offer support and insight on valuation.

Beacon and the company’s attorney negotiated a seller friendly letter of intent for the purchase of the company’s stock by the national holding company.

Beacon worked with the company’s CPA extensive due diligence performed by a regional CPA firm and a large New York based law firm.

The transaction exceeded the desired sale price and included 90% in cash at closing and a reasonable escrow holdback.  Beacon was able to negotiate a 20% increase in the initial offer as well as an increase in cash at closing. The product development shareholder has a consulting agreement to assist with new product introduction and the operational shareholder was able to retire and spend time with her grandkids.

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