Case Study:

Company Sale

Wagner Supply Company

Business Description:

Wagner Supply Company, Inc. is one of the leading value-add distributors of janitorial, sanitation and industrial products in its West and North Texas markets. Over its 37 year history, Wagner has built a strong, durable reputation for providing a high level of customer service and has grown to operate three branches (82,600 square feet) and employ over 60 people. Wagner maintains a diversified customer mix, recurring revenue business model, a focus on a consultative, relationship-based sales approach and has achieved consistent growth, steady margins and high profitability. Wagner is family owned and operated.

Challenge:

Although not actively engaged in marketing the business, the owners were approached by a single strategic buyer to inquire about their interest in a company sale. Select confidential information was shared, but a deal was never reached due to low valuation and unacceptable terms. Additionally, the succession plan to the second generation had a long timetable that was not appealing to the first generation. Further, Wagner had recently transitioned to a new ERP system, financials were not audited and the owners were extremely sensitive about maintaining confidentiality and discretion.


Solution:

Subsequent to the termination of discussions with the strategic buyer, the owners desired to more broadly "test the market's interest" in Wagner to determine if a liquidity event could be achieved with a high quality partner. The owners engaged Wilcox Investment Bankers as their merger & acquisition sell-side advisor.

We ran an aggressive marketing effort to build an auction among prospective buyers. We prepared the marketing materials and solicited interest from over 200 targeted private equity groups and strategic buyers. 100 groups executed non-disclosure/confidentiality agreements and received the marketing package. After hosting over 40 conference calls with interested parties, Wagner received multiple bids. Ultimately, we negotiated a favorable all-cash asset sale with Imperial Dade, a leading national distributor of disposable food service and janitorial supplies backed by Bain Capital.

Wilcox Investment Bankers listened to the owners' goals, structured a transaction strategy to achieve those goals and aggressively executed the marketing process. Once the parties executed the letter of intent (LOI), the deal closed in less than 40 days. Parties believe this combination will create significant strategic value as it expands Imperial Dade's geographic markets and there are numerous purchase synergies and complementary sales and marketing opportunities. For the owners, the outcome provided significant liquidity, surpassing their expectations, while matching them with a high quality partner. Last, all owners elected to continue as executives with Imperial Dade.