Mergers and Acquisitions Defined – It’s About People

Mergers and acquisitions is more than just the faceless megadeals you see in the media. More often mergers and acquisitions is about people. At Janas Associates, we understand that. Finding an acceptable balance of interests and maximizing shareholder value are distinguishing results of retaining the JCC team for mergers & acquisitions. As a firm, Janas consists of dedicated professionals who bring financial and managerial value to middle market companies and divisions of major companies.

The Sell Side of mergers and acquisitions usually involves a retiring owner seeking to exit a business on favorable terms. Alternatively, it can be a family or management succession, where we finance the younger generation in paying upfront cash to buy out the retiring owners while taking care of working and non-working siblings.

Within mergers and acquisitions, there is also a Partial Sale option with continued management involvement; taking chips off the table yet retaining ownership and management rights. This often improves working capital for continued operations and growth.

One example is a Southern California Auto Parts Manufacturer with two owners with an average age of 55 years, sought planning for retirement. The original valuation was estimated at $4 million. Working with Janas consulting expertise and then later Janas Marketing capabilities over a 3-year period it sold for $18 million.

While it needs to be stated for every example – Past performance is not indicative of future performance – we feel that a closing at 150% from an initial offer or estimated valuation is not as unusual as it seems in the lower middle market.

On the Buy Side of mergers and acquisitions, we work with companies that seek growth through acquisition. One example is our work with a U.S. based medical and dental laser distributor with $5 million in sales. Janas raised $25 million Euros in a blend of debt and equity to purchase a manufacturer in Ljubljana, Slovenia. The owner retained 20% over the overall value and the entity sold four years later for $100 million Euros. That’s over for 4x’s the purchase price.

The owners’ equity position was balanced with institutional equity sourced by Janas in amounts that provided the working capital to complete the plan. In the end, the owner was nicely rewarded for his capabilities and efforts.

Yes, it is about people and every story is different. Our goal is to make every one a success story. Contact us so that we can learn how to help with yours.

Steve Boehm
spb@janascorp.com