Case Study 1

Case Study 1

 

Increasing a Printing Company’s Value in Preparation for Sale

Almost without realizing it, Henry had begun preparation for the sale of his three-decade-old printing business. First, he bought out his brother’s share of the company. Then, he brought in two executives to manage the day-to-day operations.

“I knew I’d have to get out eventually,” he recalls. “I also knew we’d gotten to the point where continuing to grow the business would require a greater investment of time and capital than I was willing to invest at my age. It just felt like time.”

After Henry became a client, the Pendleton Street team worked with him to determine what his business needed to be worth in order for him to sell and live comfortably. It took another year to bring the business value up to that number. While Henry had always run a tight ship and been an excellent manager of day-to-day operations, there were little tweaks — like allowing existing equipment to depreciate rather than expensing new equipment for tax write-off purposes — that made the health of his bottom line more attractive to prospective buyers.

“The beauty was that I wasn’t in a hurry to sell,” he says. “That’s why I wasn’t interested in a business broker. But if the right people came along with the same values I have, enough money, enough know-how to take the company to the next level… when those things fit together, I wanted to be ready to go.” Eventually, the right buyer did come along. Henry sold to a private equity group at a premium to what they and other buyers had paid for other businesses like Henry’s . Today, Pendleton Street continues to manage Henry’s individual portfolio and his children’s trust funds.