Superior Sheet Metal, LLC

10 Dec Superior Sheet Metal, LLC

Seller:                 Superior Sheet Metal, LLC

Sold To:              Management Team

Superior Sheet Metal is one of the largest custom fabrication shops in New England serving the HVAC industry. The company manufactures rectangular and spiral duct in a variety of sizes as well as roof curbs, insulated ducts, oversized ducts and stainless laboratory ducts.

What made the business attractive to buyers?

• Revenue and profitability growth
• High Margins for Customized Products
• Long Term Employees, including management team
• Loyal Repeat Customers

Challenges:

• Industry splintered with multiple companies of similar size, making rollup strategy difficult
• Cyclicality of construction industry

When did Beacon first meet the owner?

Beacon first met the owner after an introduction by the company’s CPA.  The relationship began with an evaluation of the sale value of Superior Sheet Metal and a discussion of potential buyers.

Why did the Owner want to sell?

As he approached retirement age, the owner had successfully transitioned out of day to day operation of the business but was still burdened with the risk of a down cycle in the economy.  He wanted to sell during a period when the company was growing.

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 the company’s existing management team. 

The Process:

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 and other key data to create interest and downplay perceived risks while maintaining seller confidentiality.  We then prepared a list of buyers to approach with the approval of the owner.  

The owner asked if the business could be sold to the existing management team.  The two senior managers had each been with the company since inception in 2003 and had run day to day operations for the last several years.

After an initial discussion between the owner and the managers in which they expressed an interest in buying the company, Beacon met with the managers to discuss the business purchase process.  We made referrals to professional advisers to help them analyze the company and make an offer.

Beacon negotiated with the buyers’ advisory team to minimize any business disruption caused by negotiation occurring at the business location. A letter of intent was negotiated with terms acceptable to both sides.

Beacon provided the seller with an introduction to an experienced transaction attorney to assist with the preparation of the asset purchase agreement, a building lease and coordinating the closing. 

Beacon provided assistance to the buyers as they finalized a commitment for an SBA loan which combined with their investment would complete a 98% cash transaction for the seller.

As the transaction neared completion, the Covid pandemic paused proceedings as the bank, along with the SBA, focused on PPP funding for existing customers.

After providing additional information for the buyers and the bank, the transaction closed during the summer of 2020.

The seller received his desired level of cash and a long-term lease on his commercial building.  He also has the satisfaction of rewarding two key employees for their contribution to the business’ success over twenty years.

About Beacon Equity Advisors – Since 1985 Beacon Equity Advisors, a leading New England M&A advisory firm with offices in eight key cities, including Boston, MA and Manchester, NH has represented owners selling closely held businesses such as Superior Sheet Metal of Hudson, NH.  Superior Sheet Metal is a leader in the HVAC duct manufacturing industry. The Company specializes in oversized and insulated HVAC ducts to the New Hampshire, Massachusetts and Rhode Island markets.  Beacon Equity Advisors’ experience selling companies in the manufacturing industry enabled them to tell an engaging story about this manufacturing business enabling management to find the financing needed to acquire the company. Beacon represented the Board of Directors and Shareholders in working with management, negotiating deal terms and brokering the transaction.