A Marketing Services Company’s Success Story
A very successful Marketing Services Company contacted us for help with an acquisition. We met with one of the business owners, and discovered through fact finding that the two owners were in their mid 60’s and had no succession plan in place.
Succession Planning – The business is owned by two brothers. Each had children working in the business. Their trust and will documents were more than 8 years old. We assembled a team of advisors to help in the planning process. That team included a financial advisor, tax attorney, social worker and business valuation specialist.
A series of meetings were held with the Social Worker and the family members in the business to bring into the open any interpersonal issues that had been suppressed, but were affecting their business relationships.
Our Certified Financial Planner met with the family units to develop individualized retirement plans for each group, based on lifestyle expectations and earnings forecasts.
The Tax and Estate Planning Attorney taught the family members about the specifics of the current tax and inheritance law. We wrote new trusts, wills, and Powers of Attorney for Healthcare and Property issues as needed.
Then, after the business valuation was completed, a buy/sell agreement was negotiated between the two brothers to provide a tax beneficial method of transferring the ownership of the company in the event of one of the brothers’ untimely death.
Conversations concerning the planned retirement of the owners and their successors are part of an ongoing process.
Acquisition – We met with the owners to discuss their desired acquisitions – two other marketing services companies whose owners were retiring. A game plan was created that provided a full understanding of the risks and rewards of each contemplated acquisition. A valuation was done to assess the value of each target, in addition to the synergy of staff and the product lines. Discussions were held with the owners to rank the importance of various elements of the acquisition. It was determined that one of the companies was a good fit both business-wise and culturally. The other ended up not being the desirable target we had anticipated, and any plans regarding its acquisition were discarded.
Our approach and services were combined to enable negotiations to be completed and contracts signed with the suitable target. The purchaser ended up with a new business segment that augmented their existing clientele. The seller ended up knowing that their employees would be taken care of, they were being paid a reasonable price for their business, and that they would be working for the next few years, assuring a successful and profitable transition, and acquisition result.