CASE STUDY: Succeed Where Others Failed

Cornerstone’s Challenge: Succeed When Others Failed

Our client was a light industrial staffing firm serving northeast Wisconsin. At time of sale this highly successful company had been in business for about 20 years, was one of the market leaders, and had EBITDA margins of approximately 20%.

Concerned that using a local M&A firm would hurt confidentiality and limit prospects, the seller originally decided to work with a national firm. After receiving a large upfront fee from the seller, the national firm generated only one low ball offer over two years.

Cornerstone was eventually able to convince the seller that a local intermediary could provide all the national firm had promised: maximize value, confidentiality, and constant communication. After only six months, Cornerstone generated three written offers: one from a national staffing company, one from a private equity group, and one (that the seller accepted) from a local human services company that was able to realize some unique synergy.

Our Approach: Work the Deal

  1. Paid to Succeed. Finding a buyer simply meant working the deal—something the national firm probably never intended to do. We advise sellers to avoid “too-good-to-be-true” seminars. These seminars are typically tied to high upfront fees (many times in the $30,000 to $50,000 range) which reduce a broker’s incentive to actually sell the business.
  2. Limited Engagements. Each Cornerstone advisor accepts only a limited number of engagements at a time. We have time to market each opportunity and provide responsive service.
  3. International Market Reach. Our registered buyer network reaches all 50 states and numerous countries. But that’s just the start. We have a global buyer reach by marketing through international industry outlets, M&A listing sites, and our own expansive Centers of Influence.
  4. Creative Thinking. Marketing alone isn’t enough. Sometimes it takes critical thinking to find the right match. The client ultimately sold to a local nonprofit that administered housing and energy assistance programs. This was a unique but synergistic fit that allowed the client to maximize value.

Results: Sold in Under Nine Months at a Premium Price

Post transition, the seller still believes he got a premium for his business. The buyer is maintaining historic profits and is poised to grow.