As loyal readers of this online publication are aware, from time to time we like to highlight acquisitions in the news that catch our eye. These are deals that usually provide some insight into the ultimate motivation of professional buyers. Knowing why a particular buyer is interested in your company can be critical to the successful sale of your business. If you know why a buyer is willing to pay a premium for your business, you will be able to better negotiate the deal to your benefit.
The announced acquisition of Oneida Ltd (Oneida) by Monomoy Capital Partners (Monomoy) provides a classic example of this concept in action. As many of you are aware, “Oneida is the world's most recognized tabletop brand and the leading supplier of flatware and dinnerware to the foodservice market.” Monomoy is a New York-based private equity group that focuses on making strategic acquisitions in middle-market sized businesses.
You might be wondering the same thing I was once I saw this announcement: Why would an equity firm invest in an industry that appears to be so dependent on economic cycles? I mean if folks aren’t dining out at establishments that use flatware and dinnerware, then I would imagine that purchases of replacement food service equipment would be slow. As the press release points out:
“Oneida serves two broad market segments – foodservice and consumer. As North America’s #1 foodservice supplier of flatware and dinnerware, Oneida boasts a robust product and brand portfolio with many of the world’s strongest players in the hospitality, travel, restaurant and foodservice industries. In the consumer market, Oneida is the #1 tabletop brand in North America and has become one of the most globally recognized houseware brands with a large installed customer base.”
So a couple of things become clearer. As I highlighted above, Oneida just isn’t any other flatware/dinnerware/tabletop brand in the industry. They are in the number one position both in the foodservice industry AND the consumer market. We have discussed the importance of intangible assets before. One of the most important intangible assets (also known as “off-balance sheet assets”) is brand-name recognition. Although no details regarding the transaction were announced, it is safe to assume that the investment bank working for Oneida was well aware of how important the acquisition of the number one brand in both markets was to Monomoy.
But still the question remains, why Oneida? Of course acquiring any brand with the number one position in two key markets is a wise financial move. However, if you dig a bit deeper, you discover that Monomoy has a current portfolio company named Anchor Hocking (Anchor). For those of you unaware of Anchor, here is a brief description of its business from its website:
“Anchor is a leading North American designer, manufacturer and distributor of tabletop glassware products, providing the market place a complete tabletop solution. Anchor’s product line includes glass beverageware, bakeware, storage containers and barware; glass candle containers; high-end spirit bottles and specialty glass items. Anchor also sells glassware to both the consumer and the foodservice markets.”
So now the synergies – the motivations – behind the deal become clear. By combining Anchor, Monomoy’s current platform company, with Oneida, the new company will have the dominant position in many segments of the market.
Based on this, I would assume that Monomoy was willing to pay a premium for Oneida. As with all deals, if you can understand why a buyer is motivated to make an acquisition, you can negotiate a far better deal. Of course in a win-win scenario like this, not only are there synergies in play, Monomoy’s business model is designed to bring “customized business improvement programs in all portfolio companies that reduce operating expenses, increase profitability and encourage profitable growth.”
In many middle-market transactions like this, it is the financial, marketing and managerial expertise that the equity firm can bring to the table that really aids in the ongoing growth of both entities. Again, a real win-win for all groups involved.
We bring this deal story to you since it is just one example of the types of professional buyers that are active in the market. Generational Equity has relationships with literally thousands of buyers – buyers that have told us exactly what they are looking for in acquisition targets. If you would like to learn more about our processes, please contact us.
Chances are very good that there are buyers active in your niche right now as well. We would be glad to meet with you and explore your specific options. Given the tremendous economic and political uncertainty facing the country right now, you owe it to yourself and your family to ensure that every option is open to you. Since most of your net worth is tied up in your company, proactively planning for your future is a wise move.
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We thank you Eric and Generational Equity making our dream come true.Larry Moore, Owner, A Company Portable Restrooms
We were represented by Michael Goss with Generational. The due diligence was grueling and exhausting, but Michael propped us up and kept us motivated throughout the process. Debi and I continued to ask each other how we could possibly make it through this process without the assistance of Michael. Michael's professionalism and knowledge is absolutely amazing, and we are so blessed to have had him by our side as we made our future dreams come true.Bob and Debi Lee, Owners of BL Technology, Inc and BL Tl Services, LLC
Thanks to you, the entire GE team and especially Michael Goss for driving a great valuation, coaching me and driving the process across the finish line. Please let me know if there is anything I can do to support GE going forward. P.S. Given my experience with GE I felt comfortable enough to sign up with Generation Wealth Advisors!Tom Currier, Former President & CEO, Rackmount Solutions
Generational Equity’s assistance was invaluable in compiling and marketing our business.Bil MacLeslie, CEO, ipHouse
We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
I quickly recognized that Don was working for Sharpe Mixers above all else, and held our interests above others.Jay Dinnison, Owner of Sharpe Mixers
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.Bil MacLeslie, CEO, ipHouse
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Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).Bil MacLeslie, CEO, ipHouse
The most important contribution I think Ahmad made was with his personality and work ethic. He is sincere, efficient, and very hard working. He was available to me at all times, whether it was for specific detail of the negotiation or just to talk through the bigger picture. He listened, advised, and recommended, but never forced his idea or opinions. In the time we worked together, he became a valued colleague and also a friend.Salvo Stoch, Founder and CEO of Sleeping Partners
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.Ralph Noblin, President of Noblin & Associates
Thank you again for all your guidance and support. Any company will achieve what they intend, if they have you on their team!Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Greetings Mike. Thank you for the captivating and compelling presentation you made at the Phoenix presentation last week. Over many years in business yours was the most informative and well-presented presentation, on any subject, that I have ever attended! Your energy and enthusiasm combined with your concise and captivating support of your positions with easily understood examples and data was compelling.Pete L.
We knew it would be a difficult task to have someone really understand our business and our market, prior to researching a possible buyer, so it was imperative that we found someone of your caliber, with definite proven experience in this area.Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
After attending a conference with GE, I decided that the value they bring would be worth the expense and as soon as I started working with them, I realized that was the right decision. When we started to get LOIs, Fred Zweifel took the lead on the communication and supported negotiations throughout the process, which got tricky as we moved forward. I learned that it can be common for companies to make a great offer then work to erode that price with their discoveries, but Fred and the GE team kept that from happening.Caroline Connelly, CEO, OptoTest
I must say that I have never worked with a more driven, competent and focused individual as Don Ho.Jay Dinnison, Owner of Sharpe Mixers
I decided to attend the conference and hopefully receive some guidance on how to structure an exit plan of my business. Upon arriving at the conference, I was so impressed with the presentation given by Generational Equity that I set a future appointment that week to discuss the possibility of selling my business with their Senior Managing Director David Robinson.JoAnn Ellis, Owner of Fondren 5 Star Kennels
I need to say an immense thank you to Don Ho for his stellar work ethic, attention to detail, and tireless effort. Also thank you to the whole crew at GE! Without you, Don could not do such a phenomenal job. We were shooting for closing and funding before the end of 2020, due to the uncertainty of the political landscape and taxes. I am happy to report we closed last week and will be funding tomorrow.Dr. Caty J. Catron PhD, RN, VA-BC – Owner, Vic The Picc, LLC
I am pleased that I was able to work with Andrew Byrd throughout this experience. From the first meeting we had in Minneapolis I felt that I was in good hands. His knowledge and expertise is second to none. He guided the process consistently throughout. I feel lucky that I was pared with Andrew and could not be happier that I chose Generational Equity to handle this major life event. Thank you Andrew and GenEq for everything!Eric Erlandson, Owner, Action Fastenings, Inc.
We were happy to see the interest in our company and what we cherished has not just a valuable company but an important company to the communities we served in.Larry Moore, Owner, A Company Portable Restrooms
The help you provided us during each step of this process made us feel very comfortable and confident we were selecting the right approach to transition our Company.Andy Graham, Vice President, Modern Heating & Plumbing
T.D., thank you so much! You are a great leader! I love how you are using your gifts and talents to better others. You are clearly a GREAT COACH! This 3 day session undoubtedly changed the future of our business, and very well may have been the sole catalyst to save my company, my health and my marriage! A genuine “thank you” from the bottom of my heart.Bryan D. Horn, Owner, Over Under Clothing
I wanted to take this opportunity to thank you for all that you have done for us. Not only did you take care of all the aspects of the sale but took extra care to make sure we knew what it looked like every step of the way. I will definitely recommend your company to anyone that is in a position to or looking to exit their business.Shane and Johanna Kline, Owners of Vision Upfitters
I couldn’t have asked for a better team than Michael and Deborah. We couldn’t have done it without them.Robert Evans, President and CEO of Mealtracker Dietary Software
The professionals at Generational Equity then helped develop a roadmap for enhancing the value of the firm and an evaluation report. This was completed by June 14, 2021. We then developed the Confidential Information Memorandum and put Taylor Studios, Inc. on the market by July.Betty L. Brennan, President, Taylor Studios
Generational Equity’s professional staff helped me every step of the way. Their network and professionals are the only reason I sold my company this quickly. For me this is a once in a lifetime sale and I was unfamiliar with the process. I was able to lean on them with questions and concerns.
We had the pleasure of working with Mr. Ahmad Behjati Managing Director, M&A, for Generational Equity during our acquisition of Papa's Dodge in late 2021. Generational Equity and Mr. Behjati represented and marketed Papa’s Dodge. As our primary contact, Mr. Behjati was professional in every facet of this acquisition process, conveying valuable advice most times and assisting us in every step of the process.Rick Greene of Dobbs Equity Partners LLC
The process was much more involved than I expected and your help, experience and advice was a big factor in making the negotiations go as smoothly as possible.Terry D. Wickman, President, Keytroller
Through the sale process, Generational brought in several interested buyers and we closed in about 6 months. I am so glad I accepted that invitation to the conference and could not be happier with the whole process. The team at Generational coupled with their knowledge and guidance was so valuable that in the end, I know I could never have done this on my own!JoAnn Ellis, Owner of Fondren 5 Star Kennels
I wanted to write you a quick letter to express our appreciation and our delight on the outcome of helping us through the process of our recent sale. We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.Terry D. Wickman, President, Keytroller
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