SELL ME YOUR BUSINESS…OR BUY MINE!
The Challenge:
By the end of 2005 it was clear that Toolless was not growing at the rate where it would make any of the shareholders the kind of return’s we wanted.  We either had to grow our top and bottom lines, or sell. 

The Solution:
I phoned each of our 4 competitors, asking if any of them wanted to sell us their book of business.  They all said no.  I called them all back and asked if they wanted to buy.  They each said yes.  I set up an auction, of sorts.  I had a packet of information ready to go, they each had 6 weeks, to make an offer.  If their offer was competitive, I would come back to them only once with a request to increase their offer.  I wanted to keep the whole process above board and professional, and at the same time I wanted to get the highest price possible.  Each prospect visited our facility, we were open book, except for our customer list.  Each placed an offer by the deadline.  After reviewing the offers, I approached the company with the second highest offer, told them they were #2, and gave them the opportunity to raise their bid, which they did, putting them in the #1 slot.  I then contacted the former #1, told them they were #2 and asked if they wanted to raise their offer, which they did, putting them back in the #1 spot.  This 2-step process yielded a selling price that was 30% higher than the initial bids.

BUY MY COMPANY…PLEASE?
The Challenge:
Our strategy was to buy a company, either a start up or small ongoing concern, that we could build into an online business, with outsourced manufacturing, few fixed assets and low operating capital requirements.  The plan was to build a brand, sell it 5-8 years later and make some money along the way.  My partner has been marketing into the high end vacation home, spa and resort market for years, and I’ve been in manufacturing and business development for years.

The Solution:
We looked for quite a long time, and evaluated numerous opportunities.  I have run across many companies, products and ideas that were really good, but only a rare few are extra-ordinary like Jane’s.  “Jane Doe” had been selling her bath and body products at a local farmer’s market for 10 years.  She was an absolute genius at developing formulations for oils, salves, bath salts and lotions that were not only deliciously scented, but also had wonderful healing properties and were all natural and organic.  Simply put, her stuff was tremendous.  But she was not a business person.  She needed marketing, and a business savvy that she would never have. 

The value of Jane’s business was negligible, as there was only a small customer list, no brand awareness, and products were only available at the market.  The only value was in the recipe’s and formulations.  We bought Jane’s recipe’s, formulations and mailing list for a minimal amount of cash and put her on a 2-year contract with significant upside potential if the company succeeded.  We re-branded the line, built a website, and targeted a few high end hotels for exposure.  Jane continued to develop products under our brand.  12 months later, our brand was in the only LEED certified Spa in the city, and continues to build presence on the web

THE TOOLLESS ACQUISITION WITH INTERNATIONAL LICENSE
The Challenge:
I wanted to purchase a small company using a proprietary, licensed technology from a large injection molder.  The German licensor was killing the deal.

The Solution:
When the large injection molder, “Molding, Inc.”, purchased a Canadian injection molder during their acquisition spree, they also obtained an exclusive license from a German company to use the proprietary, “Tool-Less technology” in North America.  Within 6 months of the purchase, Molding, Inc. was out of compliance with the terms of the license, which required minimum royalty levels based on sales, and minimum equipment purchases each quarter.  

When I started negotiating the terms of purchase of the Tool-Less business with Molding, Inc., the license quickly became a deal killer.  The German company was not willing to agree to the deal, and because Molding, Inc. was in default, the Germans had the right to kill the sale.  Molding, Inc. was unwilling or unable to deal with the German company, so I stepped in and created a solution where the licensor had the right to sell 2 additional licenses in North America, in exchange for forgiveness of Molding, Inc.’s past due royalties and equipment purchases, and my agreement to new minimum royalty levels and equipment purchases.  The German company also agreed to provide generous terms on the new machine that I needed right away, as well as sending technicians over to maintain our existing machines.  We had a 3-party closing, which included a new license agreement and the purchase and sale of assets.