Oftentimes, the assumption is that the function and value a “broker” brings to the transaction is locating a buyer. That presumption is simply not true. That’s nothing more than a description of a “marriage broker”, that is, an ill-equipped broker introducing a buyer and seller and performing minimal services to actually manage the transaction to a successful closing. With over 35 years of experience, OCA has observed many use the buyer and seller introduction model that rarely produces quality results. As we have said for decades, “there are many in our industry, and far fewer in our profession.”
Successful transactions with favorable outcomes are the result of employing pre-emptive measures in a multitude of areas that will later impact the transaction, screen through and locate the “right buyer”, and then invest the dedicated time, resources, and expertise in managing a proven deal-flow process.
A transaction may start with a buyer and seller, but deals do not happen in a vacuum. Others will eventually become a part of the transaction, and they will have varying perspectives that can adjust, impact or even “kill the deal”. Who are they? Attorneys (each party), CPAs (each party), lenders and underwriters, the SBA, valuation analysts, machinery and equipment appraisers, real estate appraisers, landlords, employees or management teams, insurers, critical customers or vendors or suppliers, regulatory and licensing agents, etc. . . The list can be long, but the important matter is knowing how to anticipate the challenges that will or may arise, already have solutions prepared, and have experience and confidence to interface with all the parties involved while keeping the deal and momentum moving forward – – such micro-management, is the standard at OCA!
OCA is grateful for the opportunities to professionally represent Clients and help all the parties involved in transactions. We serve our Clients and transactions with dedication, integrity and passion. If we do not get the sense we will enjoy the people involved or the process, we decline the assignment (regardless of earning fees).
Below are a few “case studies” that offer some insight as to WHY intelligent Buyers and Sellers work with OCA, and WHY so many professionals refer their clients to OCA.
If you have an interest in Selling or Buying a business, or have someone you would like to refer to us,
Call us today to confidentially discuss your options . . . you’ll be glad you did!
Referred to OCA from an attorney, OCA represented the Sellers. Located in a small northern Oklahoma community, the retiring owners were the third generation of family ownership. They had no children or heirs to pass the business to. For decades the community and surrounding area had come to rely upon the business to provide retail automotive parts and full-service auto repair. In this case, OCA’s mandate was not to just locate a buyer, but instead, to locate the “right buyer”. The Buyer would need to “fit in” with this rural community, have the necessary capital to invest in the acquisition and operate it afterwards, be credit worthy for lending approval, have at least a moderate level of automotive repair experience, and have the business acumen to operate the business with both retail employees and shop technicians in place. OCA interviewed approximately 50 prospective buyers and inquiries before locating the “right buyer”. Once the Buyer was onboard, the price and terms were negotiated. The sale included all the tangible operating assets (inventory, parts, furniture, fixtures, equipment, automotive lifts, diagnostics, tools, shop equipment, the real estate, buildings and improvements). OCA coordinated efforts with a regional lender, and conventional funding was quickly arranged for the Buyer. The Seller was not required to carry a promissory note, so the Seller received all cash at the closing. The closing took place 76 days after receipt of the Letter of Intent. Today, the Buyer and the business continue to operate and serve the community and surrounding area. The Sellers remain an integral part of the community while focusing their time and efforts on their ranch and their church family.
Located in eastern Oklahoma, the company manufactures post-frame buildings, wood trusses, roll-formed metal roofing and siding and trim products. It operates from 130,000 square feet spread throughout several buildings. The business sells and distributes to a multi-state area. After 24 years in business, the Owner contacted OCA to determine a marketable value for his company, which OCA did. Then OCA remained in an advisory / consulting role with the Owner. After 2+ years, OCA determined the marketable value and the appetite of Buyers and Lenders was ready for a sale, and the Owner concurred. OCA interviewed and entertained offers from dozens of Buyer prospects (Investors, Family Offices, and Private Equity Groups). Ultimately, the business was sold to a Private Equity Group from Chicago. OCA made funding recommendations. A Tulsa area bank provided the senior debt and a mezzanine group from Miami, Florida funded the remainder. OCA was involved with and micro-managed every detail of the transaction, from valuation, price and terms negotiation, financial modeling, due diligence, training and transitional issues, drafting contracts and agreements, and coordinated the closing. The closing took place about 120 days after an executed Letter of Intent. As an added inducement, and valuable consideration, rollover equity was negotiated on behalf of OCA’s Client (the Seller). After eleven years under the new ownership (the Private Equity Group), a large industry national strategic buyer has acquired the company, along with the retained ownership being held by OCA’s Client (the rollover equity stake). OCA’s Client is quite happy with how the sale strategy worked (according to plan) – he got paid twice!
Referred to OCA from an attorney, OCA represented the Sellers. Located in a mid-sized city in northeastern Oklahoma, the retiring owners were the second generation of family ownership. The owners were at the age for retirement, and their son was still a minor, so they had no one to pass the business to. Although the business does provide excavation services to a wide array of customers, the primary focus of the business is servicing the electrical utilities market. The company had long-term contracts with American Electric & Power (PSO – Public Service Company, in Oklahoma). The business provides for the excavation, clean-up, and installation of non-energized wires in a multi-state area. The owners had been approached by a synergistic buyer over three years before being referred to OCA. The Sellers and the Buyer had generally agreed to the price and some basic terms. However, they simply could not get the funding arranged and the primary customer (AEP / PSO) was unlikely to approve of the sale. Over the years, OCA has many times helped get a deal closed for a Seller and Buyer when they simply could not get there on their own. So, this scenario was not unusual for OCA. Once engaged by the Sellers, OCA began working closely with the Sellers and the synergistic Buyer. OCA saw the need to package a transaction that would meet the approval of the Sellers, Buyer, Lenders, Underwriters, Third-party Valuation Analysts, the SBA, Attorneys, CPAs, and the Primary Customer (AEP/PSO) to transfer the long-term contracts. Therefore OCA: developed various valuation models based upon different operating scenarios, negotiated the price and specifically detailed terms of the sale that protected the interest of all the parties involved, developed funding and financial modeling, repayment structures with performance benchmarks and suspensions, assisted and prepared the Buyer for introduction to the Lender, coordinated communications and terms with the Buyer and Lender, preemptively engaged in “shop-talk” with the third-party valuation analyst and a separate machinery and equipment appraiser, assisted with the due diligence process, drafted all the legal documents (Purchase & Sale Agreement, Bill of Sale, Property Excluded, Assigned Contracts, Assumed Contracts, Non-Competition and Non-Solicitation Agreement, Promissory Note, Security Agreement, Guaranty, Training and Transition Agreement, Facility Lease Agreement, etc. . .), and helped guide the Sellers and Buyer to get the Long-term Contracts with AEP/PSO reissued to the new owner, the Strategic Buyer. Once OCA was fully engaged in the process with all the necessary information, and in spite of the Thanksgiving and Christmas holiday season (when all professionals are difficult to locate or interface with), the closing took place in 135 days.
Referred to OCA from a former OCA Client, OCA represented the Seller. Located in the Tulsa Metro Area, the surviving widowed owner found herself in devastating circumstances she had never foreseen. In a very short span of time, the wife lost three family members in three separate incidents. She had not been involved in the business and had no knowledge how to operate it, nor was she prepared to do so. To preserve and protect the value of the business in a sale OCA needed to act quickly and decisively, properly prepare the business to go into the market, and monitor and advise the operational concerns throughout the sale process. The business dredges and excavates sand and soil from different creeks and beds in northeastern Oklahoma, screens through the vast tons of collected materials, and separates the materials into products for various uses by a wide array of customers (builders, contractors, cities, universities, schools, sports complexes, and homeowners). The business is also a collection point for area landscapers to dump their waste (leaves, branches, limbs, etc. . .) and then convert and season the collected materials into mulch for purchase by landscapers and resellers in the future. The company had a number of employees and a fleet of large and heavy equipment along with dump trucks and other vehicles. OCA proactively reached out to industry buyers, strategic and synergistic buyers, investment groups, and marketed for entrepreneurial buyers. It wasn’t long before OCA located the “right entrepreneurial buyer”. This gentleman was driven to be an owner / operator of a business within the Tulsa Metro Area. OCA developed financial models based upon various operational scenarios under new ownership and management, prepared lending and credit models for repayment based upon different prices and terms, negotiated the price and specific terms with the Buyer, collaborated with the Buyer to prepare a Mutually Agreed Letter of Intent, assisted with the due diligence and property inspections, helped gather 8-10 real property abstracts, prepared notes and coached for Introduction to Employees of the New Owner, assisted with review of additional properties for the Buyer to lease or acquire for future mining and dredging, prepared Progress Checklists throughout the sale process for both Seller and Buyer, mediated a few contentious issues, OCA assisted in preparing all the legal contracts and documents for final review by legal counsels, assisted with transfer of Permits with the Oklahoma Dept. of Mines (regulatory body), and much much more (as OCA does as a matter of necessity). The purchase included the business operations and goodwill, all the parcels of real property, heavy machinery and equipment, trucks, inventory, and all non-cash operating assets. The closing took place 64 days after the executed Letter of Intent. That “right entrepreneurial Buyer” has done extremely well with the company. Today, the business is much larger and performing well. The widowed owner was able to retire and focus on family and other life matters.
Referred to OCA from a regional bank, OCA represented the Seller. With large offices and property in Tulsa and Oklahoma City, the owner wanted to retire with his wife to a newly built ranch home in another county. The business was a large disaster and restoration company focused solely upon commercial projects (hospitals, schools, industrial, and commercial properties). The company not only serviced the clean-up but also full-scale construction in many instances (the Moore schools after a devasting tornado). The company serviced a multi-state region. The owner had been approached by an out-of-state synergistic buyer about four or five years before being referred to OCA. Throughout those years the Seller and Buyer had unsuccessfully been trying to negotiate price and terms and reach a “meeting of the minds”. Over the years, OCA has many times helped get a deal closed for a Seller and Buyer when they simply could not get there on their own. So, this scenario was not unusual for OCA. Once OCA was fully engaged, OCA researched the Buyer and discovered that the investment funds were originating from a Chicago based capital group, and the founder of the capital group was someone with whom OCA’s founder had a relationship with, having served together on several national conference panels as subject matter experts. After gathering enough information, OCA speculated that the Buyer’s strategy was to execute a “roll-up” within the disaster and restoration industry. With that thought in mind, OCA entered preliminary discussions with the Buyer about their concept of a “value proposition”, and that OCA’s Client company could be the ”bell-cow” for a roll-up. It wasn’t long before a Letter of Intent covering 10 areas was proffered from the Buyer. OCA recognized that historically the two parties came to impasses trying to move forward. Therefore, OCA recommended to the Client that the offer be declined, and OCA would try to work collaboratively with the Buyer to address additional and more salient points that would help avoid failed negotiations along the way. After several discussions and negotiations, a Mutually Agreed Letter of Intent was executed that covered 22 topics with great specificity. The closing took place about 54 days after the executed Letter of Intent. OCA suggested to the Seller and Buyer that it might be tax efficient and beneficial to both parties to structure the transaction within a “little known” IRS code election that allows for a hybrid transaction (treated both as an asset and stock transfer). OCA was involved in every aspect of the transaction, including but not limited to: warranties and claims, leases and real property issues, the Purchase Agreement and all the attachments and exhibits and schedules, allocation issues, permits and certifications, due diligence, employee issues and retention concerns, transitional training, work in process and backlogging, vehicle transfers, equipment and on-site inspections, etc. . . OCA does what is necessary to get deals done!
OCA was contacted by the founder and majority shareholder (95%) of an energy related manufacturer in the Tulsa area. The Owner had not been integrally involved in the business for over nine years and was active in an unrelated industry. A GM (5% shareholder) was operating the company soundly and conservatively, and significant passive income was being delivered to the Owner. The company manufactured large gas diffusers, blenders, and evaporators used for various purposes (primarily with utilities) that would be transported in sections on heavy-haul trucks to ports (Houston, etc. . .) and then shipped into nine countries for installation. The Owner wanted to divest and reallocate his investment portfolio. The Owner explained that maximizing value in a sale was a priority. OCA took a moderate dive into the operational concerns and considered what “action steps” could be implemented to drive value in a sale. OCA prepared valuation perspectives based upon the current operations and that of an adjusted operational model. It was clear the adjusted operational model would drive greater value and at an accelerated pace. However, the GM was unwilling to implement the recommended changes. The Owner was at a crossroad and in a difficult position. He wanted maximum value but did not have the buy-in from the GM who would need to execute OCA’s recommended action steps. The Owner asked OCA what the options were, and OCA’s response was: “No. 1 – you can continue to own 95% of a company that is being well-managed, and which delivers a healthy seven figures to you, or No. 2 – you can sell the company but have a lower expectation of value to come from the market, or No. 3 – you can replace the GM and have OCA guide the new GM in executing OCA’s action steps at an accelerated pace, and offer a deal bonus to the new GM along with their opportunity to remain with the new owner(s).” The Owner was interested in Option No. 3. OCA located a new GM replacement candidate who was very familiar with the industry and who had interest in the timeline proposed by OCA. Terms were negotiated with the GM candidate. The new GM was employed and immediately began implementing the recommended changes. While the changes were underway, OCA began packaging the business for a sale and OCA introduced the acquisition opportunity into the market. OCA interviewed many acquisition candidates (Investment Groups, Family Offices, Private Equity Groups, and Strategic and Synergistic Buyers). OCA located an out-of-state engineering group that was designing, installing, and servicing utilities in the U.S. and abroad. The engineering group had been attempting unsuccessfully for years to penetrate markets in other countries, that OCA’s Client company was doing business in regularly. With an acquisition of OCA’s Client company those markets would open for the engineering group, and they would not only be designing, installing, and servicing, but also building the systems being installed. This economic synergy coupled with the operational changes drove the sale value and optimized the terms of the deal structure. This increased the need for additional capital on behalf of the Buyers. OCA introduced the Buyers to a Capital Group who assisted with the transaction. OCA and the Client visited the with the engineering group at their headquarters and discussed measures regarding the cultural integration issues of bringing the two organizations together while operating from separate states. OCA collaborated with the Owner and Buyers to develop and prepare a visual presentation to both management teams and how the transition would occur. Additional post-acquisition issues and concerns were addressed and planned for with contingencies in mind. As usual, OCA was involved in every aspect of the transaction. The Owner was able to capture greater sale value than first anticipated. The newly organized company has grown substantially larger than the two separate companies combined. Within a couple of years, the Tulsa operation outgrew its facility and relocated to a much larger footprint at the Port of Catoosa in Oklahoma, providing a direct waterway to the Mississippi river, and a means to expedite delivery of large manufactured equipment to an international shipping port.
OCA was contacted by the founder of an aerospace manufacturing company located in Northeastern Oklahoma. The primary operating Owner (the husband) was an engineer by trade and had been involved in the aerospace industry for decades. The other Owner (the wife) spent very little time at the business. They were ready to retire and had no available children or heirs to pass the business to. OCA explained there would be several critical and complicating factors to selling the business. These included, without limitation: there existed only ONE customer (the Dept. of Defense) – in other words there was a 100% customer concentration issue, Lenders would be challenging to attract due to the customer concentration and risk associated therewith, the Buyer would be limited to an engineer or at least a Buyer with an in-house engineer, both the Buyer and the transaction would need to be approved by the D.O.D. with a full background check, government CAGE Codes would need to be approved and transferred from the D.O.D., and limited information could be provided to Buyer candidates due to the Secrecy and Confidentiality imposed by the D.O.D. (engineering plans could not be shown to a Buyer and certain parts could not be seen by the Buyer). OCA prepared a Range of Values that the Seller might expect to come from the market. The range of bookends were based upon the type of Buyer who might acquire the company (Industry, Synergistic, or Owner/Operator). OCA interviewed 81 Buyer candidates, and an engineering entrepreneur from Oklahoma and working from California came forward. OCA negotiated price and terms and collaborated with the Buyer in drafting a Letter of Intent that addressed 25 areas of concern. The purchase would include all the operating assets, goodwill, the real property, working capital, and engineered plans and drawings. The contracts of course addressed transitional training, transfer of CAGE Codes, approvals from D.O.D., work in process and allocation of expenses and receivables associated therewith, employee retentions, government inspections, escrows, assumed liabilities, and all the usual agreements and exhibits and associated documents. An unusual aspect was coordinating the flow of information and due diligence with the Buyer while still employed and working out-of-state. As a normal course and process, OCA was involved in every aspect of the transaction. The closing took place about 91 days after the executed Letter of Intent.
This was a very unique transaction dynamic. The Buyer was the GM managing this large-scale operation in Northeastern Oklahoma situated on 38+ acres. The Buyer and Owner had been in discussions for over a year regarding a possible sale, but they could not come to terms. The Owner set a hard date deadline for moving forward or abandoning the possible sale. With very limited funds and a short timeline, the Buyer was referred to OCA, and OCA represented the Buyer in the sale/acquisition. The decades old Class C corporation primarily fabricated heaters for refineries, waste heat recovery units, and replacement parts for heating units. The completed large, fabricated equipment would be transported on heavy-haul trucks to a port city or its final destination. The Seller was not exuberant in providing the detail of information requested by OCA, which hindered OCA’s ability to hone-in on an appropriate value proposition or OCA’s ability to bring lenders aboard. After recognizing the Buyer’s seriousness, and investment of hiring OCA to pursue the acquisition, the Seller became more forthcoming, but still reserved. Much of OCA’s interaction was through the Seller’s CPA firm and M&A attorney. OCA developed different business valuations based upon various operational models under new ownership along with various debt and equity injection structures. OCA worked with the Buyer to prepare a Letter of Intent for the Seller and his M&A attorney to consider. After a few elements of seemingly “impasses” and some elements of concern, the LOI was fully executed, and the due diligence and sale process began moving forward. OCA helped prepare the Buyer, develop a Lender’s Packet, and introduced the Buyer to a regional lender for the senior debt. OCA worked closely with the lender’s team and the underwriter to fund the acquisition and meet requirements and documentation to secure credit enhancements. As the senior debt was being finalized additional private capital was brought in to secure all funding. With all the ensuing challenges and extremely unique dynamics involved (intentionally not described herein) the transaction was consummated. OCA was involved in every aspect of the transaction and provided the Buyer with advisory and advocacy services in addition to OCA’s M&A expertise. The Buyer transitioned from an employee management roll to the owner of a multi-million-dollar industrial fabricating company and is now successfully operating the business.
Because OCA had experience within the industry, the Owner of several companies (within the same industry) approached OCA to prepare and sell the three companies. The companies provided custom fabrication and distribution of a variety of hoses and fittings (hydraulic, high-pressure, discharge, pneumatic, food grade, etc. . .). Two of the companies were located in the Tulsa Metro Area (one was solely owned and the other was a partnership). The third company was solely owned and located and operated by a GM in Oklahoma City. A separate Holding Company leased employees to the operating businesses and consolidated purchasing and expenses for economic benefits.OCA began discombobulating the financials and reallocating expenses among the three businesses so OCA, Buyers, and Lenders could assign values to each of the businesses or any combination of the businesses. After calculating the entity values (individually and in different combinations), each business and the different combinations were packaged to present to the market for sale. OCA interviewed and entertained a number of Buyer candidates. One Private Equity Group flew in from as far away as Connecticut to consider purchasing all three. As the sale process continued OCA and our selling Client had discussions that took the transaction(s) in a different direction. OCA shared that it appeared the “best Buyer” was the head of sales at the larger business. The Owner quickly agreed, “he would be good, but he has no money.” It wasn’t surprising to hear - - OCA has heard this many times over the years. OCA explained that our expertise in structuring management / employee buy-outs and getting them funded could deliver optimal results - - the Owner could capture greater value than from a disinterested third-party Buyer and provide an opportunity to a dedicated employee that they would unlikely ever have. The Oklahoma City location could be sold to the GM who also had very little capital. OCA further explained that to accomplish sales in this manner (due to lack of capital from Buyers) it would take time for OCA to get Lenders onboard and develop debt and capital structures that would be embraced by all parties involved. The Owner / Seller was on board with the endeavor. OCA spent a great deal of time building financial models, proformas, debt structures, and detailed terms and conditions based upon historical data that could be incorporated into the loan covenants of lenders and that would meet oversight requirements of the SBA and satisfy the risk and concerns of all those involved. OCA prepared the Sales/Buyer and the GM/Buyer, developed Lender’s Packets, and introduced the Buyers to their respective Lenders for the senior debt. OCA continued to work closely with the two Buyers and their Lenders. Private capital was brought in to assist the Oklahoma City Buyer, and two sources of private capital was brought in to assist the Buyer of the two Tulsa area businesses. From start to closing the entire process took about a year. OCA’s Client was able to retire at a very young age and focused his attention on his family and volunteering as a baseball coach at a regional school district. The Tulsa Buyer who had no money and was an employed salesman became the Owner/Operator of a multi-million-dollar enterprise. OCA has since helped him buy and sell other companies within the industry and he has been very successful. He has owned operations in Tulsa, Oklahoma City, North Dakota and Mississippi. He truly was the “best Buyer”.