Helping Client Capitalize on 40+ Years of Hard Work…While Reducing Time to Close and Ensuring Best Possible Transaction

Goals of Owner

  • Desire to sell 100% of stock and retire after building very successful industrial services businesses over 40 years
  • Vast majority of wealth tied up in companies
  • Wish to create a lasting multi-generational financial legacy for his family
  • Find acquirer to provide support to tenured senior management team managing a geographically dispersed workforce and continue corporate legacy
  • Create opportunity for (non-owner) management team to obtain enhanced financial incentives
  • Complete transaction in timely manner for best possible price

Situation

  • Highly respected company (DIITL) had established itself as the largest, independent safety and integrity inspection firm in the United States, conducting OSHA-mandated on-site inspections of vehicle-mounted aerial lifts, fire trucks, airline ground support equipment, and live-line tools for the power utilities industry
  • Owner had gradually removed himself from daily involvement in recent years with a seasoned management team in place
  • Owner interviewed several investment bankers and chose who he felt was, “by far,” the best fit expertise and personality-wise
  • As company financials had never been audited, De NES recommended company hire an independent accounting firm to prepare a Quality of Earnings (QofE) Report to provide potential buyers greater comfort about the integrity of the numbers and strength of the company’s financial reporting procedures and management team
  • QofE report confirmed that internal, monthly financial statements were fully accurate, which allowed potential buyers to submit final bids with full confidence as well as support from third-party lenders

Transaction

  • Vigorous auction process with a number of strategic and financial groups making preliminary offers; five (5) groups selected to meet with owner and management team
  • Completed transaction with fast-growing Strategic Buyer with considerable financing backing from high net worth individuals seeking to aggressively expand its broad industrial inspection services footprint across the U.S. and Canada
  • Transaction closed 3-4 weeks earlier than anticipated due to clean QofE and vigorous effort to collect, review and post required due diligence materials before buyer finalist chosen
  • Post-transaction, owner fully retired and did not retain an ownership stake
  • Owner removed from all personal guarantees from bank and credit lines
  • Strategic Buyer included key employees in attractive long-term incentive compensation plan for senior employees