Content Archives - Page 3 of 14

Clint Bundy welcomes Alex Chausovsky to Bundy Group, highlighting his advisory expertise. Alex shares his career path, emphasizing his roles in market research, economics, and labor market analysis. They discuss the 2024 macroeconomic outlook, noting the positive economic performance in 2023, the influence of interest rates on manufacturing, and anticipated slower growth in 2024. Alex advises focusing on interest rate policies over political events, and expresses optimism for the industrial technology and automation sector. He also stresses the importance of talent acquisition and retention in healthcare.

About Bundy Group

Established in 1989, Bundy Group is an industry-focused investment bank that specializes in representing business owners and management teams in business sales, acquisitions, and capital raises. The team of highly experienced investment bankers leverages extensive industry knowledge and skill to provide hands-on guidance to clients through every phase of the business transaction. Bundy Group has been a trusted partner in more than 250 closed deals over the past 34 years, providing high quality options, actionable insights, and delivery of optimal strategic fit at a premium value for our clients.

Bundy Group Securities, LLC is a registered broker-dealer and member of FINRA and SIPC. More information on the background of Bundy Group Securities, LLC is available at FINRA's BrokerCheck.

Clint Bundy and Stewart Carlin of Bundy Group delve into 2023's market trends, their company's robust performance, and a case study on Ultimation. Despite a dip in transaction volume in 2023 due to higher financing costs and recession fears, Bundy Group thrived, boasting higher revenue and a 50% valuation premium for clients. They spotlight Ultimation, where a complex value proposition and e-commerce focus doubled the valuation. Bundy Group anticipates a promising M&A market in 2024, with stabilized capital costs and emphasis on healthcare, technology, and business services sectors.

About Bundy Group

Bundy Group Securities, LLC is a registered broker-dealer and member of FINRA and SIPC. More information on the background of Bundy Group Securities, LLC is available at FINRA's BrokerCheck.

The aesthetics market is ripe with opportunities for practice owners. Whether it's building value in anticipation of a future sale or engaging in a consortium sale for immediate benefits, understanding the market dynamics is key. With the right guidance and strategic approach, practice owners can navigate this landscape to realize the full potential of their life’s work.

About Bundy Group

Bundy Group Securities, LLC is a registered broker-dealer and member of FINRA and SIPC. More information on the background of Bundy Group Securities, LLC is available at FINRA's BrokerCheck.

In a well-orchestrated business sale or capital raise, an owner should be able to attract buyers that demonstrate their intense demand for the company, including through paying a robust value and closing on those deal terms. However, while nearly all strategic buyers and investors (i.e. financial sponsors) will try to convince owners of their sincere interest, the reality is that not all of them fit into a leading contender category. Therefore, it is critical for business owners to understand the distinction between buyers and sponsors who want a company and those who genuinely need it. Selecting the best party through the right process can be the difference in millions of dollars in value, a smooth versus rough integration period, and a successfully closed transaction versus a blown deal.

The Supply of Strategic Buyers and Financial Sponsors Today

Most business owners today are well aware of the overabundance of strategic buyers and financial sponsors and their interest in acquiring or investing in privately held companies. Market data supports this trend, with over a trillion dollars of capital targeting acquisitions and investments in privately held businesses. Therefore, owners and executives are frequently inundated with phone calls, emails, and even visits from potential buyers and financial sponsors, expressing a keen interest in their companies.

The strategic buyer and financial sponsor demand outweighs the supply of quality companies, which can provide an amazing position of strength for business owners...if utilized appropriately. However, buyers are in the business of acquiring companies for the best terms possible. The buyers who desire an acquisition but are willing to walk away instead of paying full market value will use every tool and tactic available to obtain this arbitrage benefit. As a result, an owner and the company’s advisors need to be able to proactively evaluate a buyer’s closed deal track record, motivations, diligence process, and reputation to determine who is worth selecting and focusing on through to close of a transaction. Equally importantly, a selling business must introduce an element of competition as the premier buyers will put their best foot forward when pushed to do so.

Distinguishing Between Buyer Wants and Needs

Actions speak louder than words, including in the field of mergers and acquisitions (M&A). A company seeking to sell or raise capital can effectively use information and a well-managed process to not only solicit interest but separate the “best from the rest” before deciding the best partner fit.

Competitive Process: Engaging in a competitive process is effectively an auction contest that involves the best strategic and financial sponsor buyers. This process, which is best managed by an investment banker, allows sellers to use competition and defined deal mile markers (example – offer dates; permitted due diligence timeframes) to whittle down the pool of buyers to the best parties. See Bundy Group’s article, The Competitive Sale Process, for additional information.
Education and Due Diligence: No offer is worth the paper it is written on without a significant amount of committed due diligence and education by the buyer. A common tactic from buyers is to offer a quick offer submission, and push for the owner to sign an offer with exclusivity provisions in it before the buyer then invests time and energy into understanding the company. The truly motivated buyer will invest in doing research and diligence, without a signed offer in place, to demonstrate their true interest. Only after going to these lengths will the buyer then submit a well-educated offer.
Certainty to Close: The ability to close a transaction, also known as the “certainty to close,” is a valuable yardstick in judging which buyers fit into the leading contender category. To determine a buyer’s true ability to stand behind an offer and close a transaction is a critical process unto itself. The buyer in need of an acquisition will go to whatever necessary lengths to demonstrate its ability to close a transaction. The second-tier buyers will talk up their ability to close but be unable to prove it when they moment demands it.

Takeaways

In the realm of M&A, distinguishing between buyers who want a business and those who genuinely need an acquisition is both an art and a science. The competitive process, due diligence, and evaluation of certainty to close play a pivotal role in making this distinction. Business owners should recognize that taking the time to discern these critical subtleties can lead to securing the best possible outcome for their business. Hiring a seasoned investment banker can provide an immense advantage to a seller, as that experienced advisor can not only run the process but also bring proprietary intelligence that can be utilized to narrow down the pool of buyers.

Even in M&A markets that have challenges and macroeconomic headwinds, buyers who truly need a business are willing to pay competitive multiples and close on a transaction. As long as businesses take the necessary steps to differentiate between buyer and investor wants and needs, then the probabilities substantially increase that the owners will close a transaction at a strong valuation. The world of business sales and capital raises might appear complex, but when approached methodically and with expert guidance, owners can feel confidence that they didn’t leave money on the table or didn’t see a quality universe of options.

In this article for Plant Engineering Magazine, Bundy Group kicks off the new year by recounting the seven automation transactions of January and analyzing key driving forces behind the continued increase in capital market activity.

The automation and industrial technology markets continue to experience a tremendous amount of mergers & acquisitions (M&A) and capital markets activity. Drivers of this activity include the growth-oriented nature of the automation and industrial technology markets, the consolidation opportunities within these industries, and the strength of many of the companies operating within them. Furthermore, the automation and industrial technology sectors have attracted a critical mass of strategic buyers and financial sponsors (i.e. private equity groups, family offices, institutional investors) that are looking to own or invest in companies in the industries. From such, Bundy Group closed transactions as Ultimation and Industrial Electric Machinery, our team continues to see strong interest from a range of qualified buyers in the automation, industrial technology and plant management segments. Further evidence of the robust M&A and capital placement activity is provided in the below list of transactions.

Bundy Group’s current engagements and owner relationships include control system integration, automated material handling, automation distribution, industrial services, and electrical services. This serves as a leading indicator for industries our team anticipates closed transactions in over the coming months. We look forward to providing these relevant updates to Plant Engineering magazine readers.

January 2024 automation transactions

1/9/24

Hastings Equity Partners, a preferred capital partner to founders of lower middle market businesses has acquired JSET Automated Technologies.Founded in 2020 by Eric Tyo and John Sloan, JSET specializes in building automation systems, installation and repairs, and electronic engineering services for data centers. Learn more.

1/9/24

Investcorp, a leading global alternative investment firm, acquired Best in Class Technology Services. BCTS is a leading provider of HVAC, electrical and plumbing maintenance, repair and replacement services for critical end markets including industrial, medical, education and commercial. Learn more.

1/8/24

GenNx360 Capital Partners announced GenServe’s acquisition of the commercial division of Austin Welder & Generator Service, Inc. In addition to the commercial division, the Company has a residential division, which was excluded from the transaction. GenServe is a portfolio company of GenNx360 Capital Partners, a New York-based private equity firm investing in middle market business services and industrial companies. Learn more.

1/8/24

V2X pioneer Danlaw has acquired Australia-based competitor Cohda Wireless, marking a significant milestone in Danlaw’s global expansion initiative, aimed at advancing connected vehicle safety and smart city solutions. Learn more.

1/8/24

Card-Monroe Corp. has acquired Greenville, South Carolina-based automation company Everworks Automation in what proves to be a strategic step forward for both companies. Card-Monroe Corp, based out of Chattanooga, Tennessee, is a leader in tufting technology. Learn more.

12/19/23

First Reserve, a leading global private equity investment firm exclusively focused on investing across diversified energy, infrastructure, and general industrial end-markets, has acquired AP Group LLC a global full-service provider of critical power plant and turbomachinery maintenance services. Financial terms of the transaction were not disclosed. Learn more.

12/1/23

Argosy Private Equity, a lower middle market private equity firm, acquired a controlling interest in Wize Solutions. Wize is a full-service warehouse racking, automation, and lock & door installation company. Founded in 2007 and based in Salt Lake City, Utah, Wize serves manufacturers and distributors across all 50 states as well as Canada, Mexico, Japan and Australia. Learn more.

In this article for Control Engineering Magazine, Bundy Group reports 13 notable automation transactions for the month of January and notes the continued growth-oriented nature within the manufacturing and plant management fields.

The automation market continues to experience a tremendous amount of mergers & acquisitions (M&A) and capital markets activity. Drivers of this activity include the growth-oriented nature of the automation market, the consolidation opportunities within the industry, and the strength of many of the companies operating within it. Furthermore, the automation market has attracted a critical mass of strategic buyers and financial sponsors (i.e. private equity groups, family offices, institutional investors) that are looking to own or invest in companies in the industry. From such, Bundy Group closed automation transactions as Ultimation and MR Systems, our team continues to see strong interest from a range of qualified buyers in the automation segment. Further evidence of the robust M&A and capital placement activity in automation is provided in the below list of transactions.

Bundy Group’s current engagements and owner relationships include control system integration, robotics, automated material handling, automation distribution, artificial intelligence, and cybersecurity. This serves as a leading indicator for submarkets our team anticipates closed transactions in over the coming months. We look forward to providing these relevant updates and transaction announcements to Control Engineering magazine readers.

January 2024 automation transactions

1/17/24

Assystem, an international engineering, digital services and project management company, has acquired 100% of the shares of KEOPS Automation, a French company specializing in the integration of industrial operating platforms and the enhancement of their data (industrial OT and IT, automated systems, supervision systems, BI applied to manufacturing). Learn more.

1/16/24

Synopsys, known primarily for electronic design automation tools used by the semiconductor industry, has acquired Ansys, a maker of complementary simulation and analysis software, for $35 billion, marking the first really big chip sector deal of 2024. This acquisition combines Synopsys’ semiconductor electronic design automation expertise with Ansys’ simulation and analysis portfolio, creating a leader in silicon to systems design solutions. Learn more.

1/11/24

Allient Inc. a global designer and manufacturer of precision and specialty Motion, Controls and Power products and solutions for targeted industries and applications, acquired SNC Manufacturing Co., Inc. SNC a premier designer and global manufacturer of electrical transformers serving blue-chip customers in defense, industrial automation, alternative power generation and energy, including electric utilities and renewable energy. Learn more.

1/11/24

ABB has acquired Swiss start-up Sevensense, a leading provider of AI-enabled 3D vision navigation technology for autonomous mobile robots (AMRs). Sevensense was founded in 2018 as a spin-off from Swiss technical University, ETH Zurich. Learn more.

1/10/24

Neocis, the global leader in robot-assisted dental implant surgery, has raised $20M in additional funding. This latest round of financing included Mirae Asset Capital/Mirae Asset Venture Investment, venture capital firms affiliated with the Mirae Asset Financial Group that invest in growth-stage healthcare and technology businesses, and NVentures, NVIDIA’s venture capital arm. Learn more.

1/9/24

Burro, a Philadelphia-based autonomous mobility company, closed a $24 million Series B co-led by New York City-based growth equity firm Catalyst Investors and Translink Capital, along with existing investors S2G Ventures, Toyota Ventures, F-Prime Capital, and Cibus Capital. Learn more.

1/9/24

1/8/24

12/20/23

Hudson Robotics and Art Robbins Instruments, a global laboratory automation solutions provider, and Argosy Healthcare Partners portfolio company, has acquired Tomtec Inc. Tomtec is a provider of automated liquid handling instruments primarily used for sample preparation in mass spectrometry. Learn more.

12/19/23

12/15/23

Sukup Manufacturing Co. has acquired Ramco Innovations, a leading automation distributor in the Midwest. The strategic partnership brings together the expertise and resources of the two industry leaders. Sheffield based Sukup is known as an innovator in reliable grain storage, drying and handling solutions. Learn more.

12/1/23

ONLINE extra

Bundy Group is a boutique investment bank that specializes in representing controls and automation, Internet of Things, and cybersecurity companies in business sales, capital raises, and acquisitions. Over the past 33 years, Bundy Group has advised and closed on over 250 transactions, which includes numerous automation-related transactions. You can learn more at www.bundygroup.com or by contacting Clint Bundy.

Bundy Group, an industry-focused investment bank, is pleased to announce that it has successfully advised Relay Fire and Safety and its private equity owner, The Riverside Company, in the acquisition of Metro Fire Inspection, a fire protection firm providing comprehensive services across all five boroughs of New York City, in addition to Suffolk County and Nassau County.

Established in 2023, Relay Fire and Safety is a Baltimore-based commercial fire protection and life safety firm providing unparalleled customer service and technological control over fire and life safety systems. The Company was formed through the merger of Advanced Fire Protection Systems and American Service Company, both of which have a combined history of over 100 years in the Fire and Life Safety industry.

“Metro Fire Inspection has been an industry leader in the fire protection industry, and the company’s impressive growth further validates the organization’s strength and value proposition,” said Mullens. “The partnership with Relay Fire and Safety, a well-respected market leader, will offer Metro Fire Inspection substantial new resources and opportunities as the company continues to grow.”

The transaction was led by Jim Mullens, Managing Director with Bundy Group.

“Jim and the Bundy Group team are recognized as investment banking specialists in the Fire and Life Safety sector. Bundy Group was instrumental in introducing our organization to Metro Fire and assisting us throughout the process,” said Jeff Abboud with The Riverside Company. “We were highly impressed with the Bundy Group team, and we are excited to find more ways to work with them in the future.”

Bundy Group has an extensive track record in the Fire and Life Safety sector, which includes advising such clients as Sisco Safety, Roanoke Sprinkler, Systems Electronics, and SuperHero Fire Protection. For more information about Bundy Group’s industry expertise and recent transactions, visit bundygroup.com.

About Bundy Group

Bundy Group Securities, LLC is a registered broker-dealer and member of FINRA and SIPC. More information on the background of Bundy Group Securities, LLC is available at FINRA's BrokerCheck.

We are in a business environment where an abundance of strategic buyers and financial sponsors exists, resulting in a constant wave of inbound calls, emails, and requested face-to-face visits to business owners from the buyer community. The proposition that these groups offer is they want to engage in direct, one-on-one conversations with business owners about an acquisition or investment. They are eager to avoid the presence of any other competition, or intermediaries, in those conversations. These seasoned buyers pitch such themes to owners as the following:

“We know your industry well and really want to acquire your business.”
“Whatever price we put into a Letter of Intent, we will close on that. We do not retrade.”
“Once you sign a Letter of Intent with us, we will close quickly.”
“You do not need to hire an investment banker or Mergers & Acquisitions advisor. We, as well as your attorney and accountant, can give you the help you need to close a transaction.”

The underlying, subtle theme that buyers are really saying to owners and executives is “Trust us. We are your friend.” The truth is that the buyer is not your friend but instead a business party that is focused on achieving two main objectives in an acquisition or investment:

Buying or investing in quality businesses
Purchasing at a valuation and structure that are most advantageous to the buyer

However, a reputable investment banking advisor, who operates with the intent of doing what is best for a client, can provide many advantages to the owner in a sale or capital raise process. For owners that are planning for a sale or capital raise, there are several key criteria they should contemplate when deciding if they should hire an investment banker versus engaging in direct conversations with a buyer.

Defining and Quantifying What an Investment Banker Delivers

A key question owners should ask themselves is how an investment banker financially benefits both their company and personal financial position in a sale. There are several value-added, measurable offerings that can be analyzed by an owner when weighing the pros versus cons of hiring an investment banker.

Measurable Investment Banker Offerings

A quality investment banker can pay for themselves, often multiple times over, by delivering additional transaction value to the owner in a sale process. In many transaction situations, a sound investment banker can easily push the buyer to pay additional purchase price that covers the advisor’s fees and expenses. Any amounts above that bar can be considered found money when compared against an unsolicited offer. For more insights on unsolicited offers, refer to the BG Insights article, How should owners respond to unsolicited offers?
An investment banking-led competitive process ensures that the company has vetted the market of buyer and / or capital options. If this process is managed in the most thorough fashion, then an owner can know with confidence that they have pushed the market as far as possible for optimal transaction terms.
Investment bankers can push buyers for more seller-favorable deal structures, which can heavily benefit the sellers and their walking away money proceeds. For more insights on deal structures, refer to the BG Insights article, Structure: The Backbone of a Mergers & Acquisitions Transaction.
An experienced and vigilant investment banker can serve as an insurance policy in a process to a company for sale. This means that the certainty to close is higher and maintaining agreed upon terms is more likely. Should a buyer attempt to retrade in price and / or terms, then that buyer can be exited from the process and another buyer, who is willing to pay a more aggressive value, can be engaged.
The investment banker can help reduce time commitments by the executive team by managing the sale process, vetting the buyers, managing buyer-seller conversations and due diligence requirements as well as making this an arm’s length transaction. By also increasing the certainty to close, the investment banker can help see the process to the finish line, further protecting management and shareholder time.

When selecting an investment bank, a shareholder group should work to understand how the investment banker can deliver value and the ways the advisor can demonstrate a positive impact on the above areas.

Defining The Services an Investment Banker Offers

There are many phases, milestones, and deliverables that an investment banker’s services can be broken into. When a business owner is interviewing an investment banker, it is important to request the advisor to provide details on these services. For the sake of simplifying for this piece, we have broken an investment banker’s services down into three core areas:

Information: Investment bankers provide a wide range of critical market and industry insights, buyer data, and financial data that may be beyond the reach of most business owners. An experienced and organized investment banker will be able to provide significant and value-added information to clients through all phases of a process. Most of this intelligence is proprietary and cannot be found through a google search or procured from an inexperienced advisor.
Advice: Strategic and deliberate guidance is at the heart of what investment bankers offer to their clients. The advisor must earn the client’s trust and understand the goals and objectives of the shareholders. Their counsel extends beyond financial aspects, encompassing purchase agreement discussions, networking capital negotiations, pre-close integration efforts, potential internal seller conflicts, and more. An objective and aggressive investment banking advisor can provide thoughtful suggestions to help achieve the client’s objectives in a sale or capital raise.
Options: Perhaps one of the most significant contributions of investment bankers is their ability to create a competitive environment and choices for the benefit of the shareholders. The advisor delivers a pool of quality buyer options to the table, thus igniting competition. This offers shareholders a position of strength and the ability to obtain maximum value, optimal structure, and find the party that is the best fit for the business as a whole. In short, an investment banker’s process helps to ensure that no money is left on the table.

Takeaways

In conclusion, deciding whether to hire an investment banker is not solely a matter of cost but rather a question of value. Business owners should recognize that quality, industry-focused investment bankers can bring an irreplaceable combination of expertise, trust, and the ability to create competitive options.

While some owners may consider navigating the sale process independently, the track record of investment bankers, who have demonstrated experience and industry specialization in securing higher valuations and more seller-favorable structures for their clients, speaks volumes. It is recommended that an owner analyzes both the tangible and intangible benefits that an investment banker can deliver in a sale process. An experienced investment banker will be able to provide you with the necessary information to complete that analysis on an advisor’s value-add.

In this article for Plant Engineering Magazine, Bundy Group provides an update on the nine defining transactions from December 2023 and what they mean for the automation, industrial technology and plant management industry.

December 2023 automation transactions

12/7/23

BECO Holding Company, an H.I.G. Capital Portfolio Company, has finalized the acquisition of Grease Lock. Developed in 2004, Grease Lock is an innovative product line designed to capture up to 98% of airborne kitchen grease, streamlining hood maintenance and enhancing fire safety in commercial kitchens. Learn more.

12/7/23

BECO Holding Company, an H.I.G. Capital Portfolio Company, has successfully acquired Electronic Supply Company. Headquartered in Mobile, AL, Electronic Supply Company, established in 1956, is a top wholesale distributor of low voltage and security products, offering monitoring station services through seven locations in the Southeastern United States. Learn more.

12/5/23

Tower Arch Capital has formed S&N Infrastructure Services, LLC in partnership with Allen Powell and the S&N leadership team, to complete the recapitalization of S&N Communications, a Louisa, VA-based specialty infrastructure services provider primarily focused on maintenance, repair, upgrade, and new construction services for communications and electric utilities infrastructure. Learn more.

12/5/23

DwyerOmega, a leading manufacturer and global provider of innovative sensors and instrumentation solutions, acquired Automation Components, Inc., further extending DwyerOmega’s sensor and instrumentation expertise in the building automation and environmental markets. DwyerOmega is a portfolio company of Arcline Investment Management. Learn more.

12/5/23

Shorehill Capital LLC sold Power Grid Components, Inc. to Blackstone Energy Transition Partners, a private equity fund affiliated with Blackstone. Power Grid serves electric utilities, original equipment manufacturers and other customers with mission-critical products used on the U.S. electric utility grid. Learn more.

12/4/23

Motion & Control Enterprises has acquired Filter Resources, Inc., an indirect subsidiary of Parker Hannifin Corporation. Filter Resources, Inc. is a distributor of mission-critical process filtration products for downstream oil and gas, petrochemical, and specialty chemical markets, operating from locations in Lake Charles, LA, and Pasadena, TX. Learn more.

12/4/23

IPS, North America’s leading solution provider for electromechanical equipment, rotating equipment, and power management systems, has acquired Wind Solutions LLC. The company, based in Sanford, North Carolina, specializes in repair upgrades, accessory components, and patent-protected yaw system components. Wind Solutions works with owner-operators and utilities across North America. Learn more.

11/30/23

RLE Technologies, a Fort Collins, CO-based provider of facility environment monitoring, fluid leak detection, and airflow management products, has been acquired by May River Capital, a Midwest-based private equity firm focused on helping high-caliber industrial businesses grow and prosper. Learn more.

11/28/23

Main Street Capital Corporation completed a new portfolio investment to facilitate the recapitalization of Compass Systems & Sales, LLC, a leading provider of end-to-end material handling systems employing innovative, custom-engineered solutions integrated with traditional conveyance systems. Learn more.

In this article for Control Engineering Magazine, Bundy Group analyzes the 12 reported automation transactions that capped-off 2023 and notes the growth-oriented nature of the market heading into 2024.

December 2023 automation transactions

12/13/23

Chipotle Mexican Grill is investing in Greenfield Robotics, a company founded with the vision of making regenerative farming more efficient, cost-effective, and sustainable by leveraging the latest advances in AI, robotics, and sensing technologies. Greenfield Robotics provides regenerative agriculture solutions without chemicals. This minority investment is being made through Chipotle’s $50 million CULTIVATE NEXT venture fund. Learn more.

12/13/23

Chipotle Mexican Grill is investing in Nitricity, a company seeking to tackle greenhouse gas emissions by creating fertilizer products that are better for fields, farmers, and the environment. Inspired by the natural occurrence of lightning breaking down nitrogen in the air and rainwater bringing it to the soil as nitrate to create natural fertilizer, Nitricity has pioneered a practice of creating artificial lightning. This minority investment is being made through Chipotle’s $50 million CULTIVATE NEXT venture fund. Learn more.

12/7/23

Dublin-headquartered Invert Robotics has raised a further €2.5 million in investment to help grow its new research and development function in Dublin. The latest round, which is in addition to a previous €10 million investment raised last year, was led by Irish EIIS fund Business Venture Partners and US investor TechNexus Venture Collaborative. Learn more.

12/7/23

12/5/23

Siemens has acquired BuntPlanet, a technology company based in San Sebastian, Spain. BuntPlanet’s award winning software has been deployed around the world to support customers with smart metering solutions, water quality, asset management, and integration of hydraulic models and artificial intelligence for detecting leaks and other anomalies in water networks. Learn more.

12/5/23

11/30/23

DynTek and rSolutions Corporation, a leading provider of professional IT services, cybersecurity, and risk management solutions throughout North America, has acquired Arctiq, a leading Cloud, DevOps, and Automation Solution Integrator. This strategic investment builds upon the merger of DynTek and rSolutions under the Gallant Capital Partners portfolio in August 2023. It highlights the mutual commitment of the companies to broaden their presence in the cloud-based solutions industry and enhance their service offerings for clients. Learn more.

11/28/23

11/22/23

Blackstone, the world’s largest alternative asset manager, announced that private equity funds managed by affiliates of Blackstone have entered into a definitive agreement to acquire Civica, a global leader in public sector software solutions, from Partners Group, a leading global private markets firm, acting on behalf of its clients. Learn more.

11/20/23

ProMach, a global leader in processing and packaging solutions, has acquired Sentry Equipment & Erectors Inc., a prominent North American manufacturer of conveyor and container handling machines. This acquisition enhances ProMach’s product offerings and reinforces its position as a major provider of systems integration solutions in North America. Learn more.

ONLINE extra

Bundy Group, an industry-focused investment bank, proudly announces its role as the exclusive advisor in guiding Compass Systems & Sales, Inc. (“Compass” or the “Company”) through a majority equity recapitalization. This transaction underscores Bundy Group's continued commitment to delivering exceptional advisory services and expertise in facilitating successful transactions for privately held companies. Furthermore, the transaction, which closed in December 2023, highlights Bundy Group’s continued specialization and track record in the automation and industrial technology sectors.

Compass was founded in 1998 and offers a broad range of automation and material handling solutions such as engineering services, system audits, construction management, operator training and system maintenance. Headquartered in Barberton, OH, the Company specializes in end-to-end automated material handling systems employing innovative, custom-engineered solutions integrated with traditional conveyance systems. Compass is led by an experienced management team that will remain in place following the transaction’s close.

“Bundy Group was hired because of our industry experience, network of strategic and financial sponsor buyers, and relationship with the owners of Compass. We were happy to assist our client in achieving such a successful outcome” said Clint Bundy, a Managing Director at Bundy Group. “This was our second automated material handling transaction of 2023, and our third automation transaction in 2023, and we couldn’t have been more pleased to work with such a quality group of professionals aligned with the Compass platform. We wish the management team all the best for the future.”

The Bundy Group client engagement team included Clint Bundy, Jordan Frickle, Stewart Carlin, and Megan Hagemann.

The selling shareholders included Alston Capital and Plexus Capital, two financial sponsors that invested in the Company, as well as Compass Systems founder, Bob Sherrod. Main Street partnered with Compass’ existing senior management team, which reinvested in the Company, to facilitate the transaction. Main Street funded the transaction with a combination of first lien, senior secured term debt, and a direct equity investment.

"Bundy Group delivered persistence and professionalism throughout our entire process. Not only did they deliver a successful outcome during a difficult financial market environment, but also in a time when a majority of our customer base was facing a historic UAW strike,” said Bob Egan, Founding Partner at Alston Capital and Shareholder/ Board Member at Compass. “I am more than thankful Bundy Group led the effort to get us over the finish line."

Bob Sherrod, Founder and CEO of Compass, stated, “We sought an investment bank that was capable of representing an organization owned by institutional and founder shareholders, had tenured experience in the automation and industrial technology sectors, and had a proven ability to close a transaction within a tight timeline. We interviewed multiple investment banks before deciding on Bundy Group, and I couldn’t have been more pleased with the outstanding work and results that our advisor delivered. We absolutely made the right decision by hiring Bundy Group.”

About Compass Systems & Sales

Founded in 1998 and headquartered in Barberton, Ohio, Compass Systems & Sales is a leading provider of end-to-end material handling systems employing innovative, custom-engineered solutions integrated with traditional conveyance systems. Compass offers a broad range of material handling solutions, including shredding, sorting, weighing, and conveying, complemented by the company's design, fabrication, installation, service, and support capabilities. Compass has developed unmatched expertise in pneumatic conveyance systems and has entrenched its position as a market leader with complete offerings of pneumatic and mechanical conveyance solutions. For more information, please visit Compass Systems' Website.

About Bundy Group

Bundy Group Securities, LLC is a registered broker-dealer and member of FINRA and SIPC. More information on the background of Bundy Group Securities, LLC is available at FINRA’s BrokerCheck.

In this article for Practical Dermatology, Clint Bundy, Managing Director of Bundy Group, breaks down the competitive business sale process in the mergers & acquisition journey and how it relates to the dermatology and aesthetics industry.

In the world of mergers and acquisitions (M&A), the competitive business sale process is a complex yet essential part of the journey, including within the dermatology and aesthetics industry. If you are a practice owner considering a business sale or capital raise, understanding this process is crucial. In this piece, the competitive business sale process will be analyzed, the key stages defined, and insights offered to help a business owner better position for a sale or capital raise and a successful outcome.

1. Key Stages of the Competitive Business Sale Process

The business sale process can be broken down into four distinct phases. Each phase is centered around creating a position of negotiating strength for the seller and driving competition. There are very few strategic buyers or financial sponsors that will put their best foot forward unless they are pushed to do so.
Preparation Phase. The preparation phase is focused on evaluating all facets of a company to position it in the best possible light for a competitive process. To use a golf analogy, it is akin to lining up in the tee box correctly and taking a few practice swings with the end-goal of smoothly hitting the ball down the center of the fairway. Key preparatory items include:
Crafting confidential marketing materials that articulate a compelling story and provide an ideal position of strength.
Developing a financial model, inclusive of future projections and key metrics to ensure the data reinforces the story.
Populating a secure data room to utilize for providing relevant information to the buyer and its advisors.
Drafting a Non-Disclosure Agreement (NDA) for the buyers to sign.
Create a strategic buyer and / or financial sponsor list by considering potential fit and track record of successful acquisition and investments. To create such a quality list, it is imperative that the owner and / or its advisors have intimate knowledge of the key players in the industry and their respective investment thesis.

2. Indication of Interest (IOI) Round The IOI round is when potential buyers express their initial interest by submitting preliminary offers, or Indications of Interest. This phase helps the seller and its advisor determine which buyers are worth continuing conversations with. Key attributes of this round include:

A material amount of information is provided by the sellers, and buyers will complete an assessment based on this data and marketing materials.
Introductory calls, and sometimes face-to-face meetings, with key executives and shareholders are often used to help both sides learn more and develop chemistry.
IOI’s are submitted by buyers, which usually contain a range of offer values, details on transaction structuring, and key due diligence items needed for the Letter of Intent round.
The seller and its investment banking advisor review the preliminary offers to assess which groups the client wants to invite to continue in the sale process.

3. Letter of Intent (LOI) Round The LOI is the formal offer, or the document that establishes the framework for the purchase agreement between the buyer seller. This phase is meant to be a much more intensive phase with the goal of driving buyer interest and attracting well-educated formal offers. Key elements of this phase include:

Sharing more detailed company information with buyers so that all critical diligence information is accomplished prior to the LOI submission date.
Hosting face-to-face management meetings between the buyer and the seller to foster chemistry building and information sharing. In short, both parties are learning more about one another.
Receiving LOIs from buyers by a deadline date with details that answer all key seller questions (i.e. purchase price, structure, deal financing, etc.)
Ensuring buyers provide a list of confirmatory due diligence items that must be accomplished after an LOI is signed along with anticipated timeline to close.
Utilizing the LOI’s against each other to drive the offers beyond what was submitted in the LOI’s. This is the moment where the seller and its investment banking advisor ensure that deal structuring is appropriate to accomplish the seller’s goals and no money is left on the table.
Ensure that the seller’s CPA and M&A attorney are able to provide thoughts and advice on the LOI’s submitted to certify all tax, accounting, and legal considerations are addressed.

4. Due Diligence and Closing The due diligence stage is where buyers conduct comprehensive investigations, including legal, financial, and operational diligence. In short, the buyer or investor is ensuring that there are no surprises and that its underwriting assumptions for the LOI are sound. This is usually the phase where any company issues or weaknesses (example – financial; employee retention; etc.), which have not been addressed, are uncovered.

While the buyer has already been selected in the LOI round, it is imperative to keep the competitive pressure on that party, as it is very common for them to attempt a retrade during diligence (i.e. attempt to close on the deal at a materially lower value and / or more buyer friendly structure).
During the period of due diligence, the seller’s counsel and buyer counsel negotiate the purchase agreement, and the transaction is closed. The payout to the respective parties (i.e. funding of the deal) occurs as a last step.

TIMELINE AND CONSIDERATIONS

The entire process can typically take 6 to 12 months. However, the process timeline depends on a variety of factors such as the complexity of the business, the quality and accessibility of financial data, the extent of due diligence required, and the intensity of the negotiation phase. Furthermore, hiring an experienced investment banker that understands the best pool of buyers for that industry and can best position the company in a process will have a substantial impact on both the transaction terms and the timeline to close.

TAKEAWAYS

Navigating the competitive business sale process in M&A transactions involves a series of well-defined stages, from preparation to closing. A business owner is highly recommended to focus on the following in a competitive process:

Focus on driving competition from the beginning to the end of a transaction to ensure maximum value and a high certainty to close at the agreed upon terms.
Prepare the company for a sale to ensure all potential issues and buyer challenges are identified and an appropriate story and defense is crafted before going to market.
Ensure that milestones and timeline are identified and then maintained so no momentum is lost.
Curate a quality list of buyers and financial sponsors, which can be included in a competitive sales process.
Contemplate hiring an experienced investment banker to manage the process, limit distractions on company management and deliver added value in a transaction over and above what could be achieved without the element of competition.

A business sale, or capital raise, is a complicated process that could yield tremendous gains for a seller or result in significant amounts of money being left “on the table.” Furthermore, the outcome could produce a quality long-term partner or a new owner that tarnishes the reputation of the company. The best way for an owner to ensure a strong outcome is to run a competitive process, ideally managed by an experienced investment banker, which delivers multiple options to drive an educated decision-making process that minimizes risk and maximizes the quality of the outcome.

January 2024 automation transactions

January 2024 automation transactions

December 2023 automation transactions

December 2023 automation transactions

ONLINE extra

TIMELINE AND CONSIDERATIONS

TAKEAWAYS

About

What We Do

Expertise