The sub-title of the press release said it all:
“Purchase Complements Company’s Portfolio of In-home Covers with Outdoor Product Line”
The operative word above is “complement.” If you look the word complement up in the dictionary, it means:
Something that completes or makes perfect: A good wine is a complement to a good meal.
The quantity or amount that completes anything: We now have a full complement of packers.
Either of two parts or things needed to complete the whole; counterpart
I took the liberty of bolding the last definition because I believe in the realm of M&A activity and buyer motivations, it sums up what a complementary acquisition is. In a win-win scenario a buyer will find a seller that creates a new entity comprised of the best of both prior companies. This is what synergies are really all about.
In the transaction I am referring to, a portfolio company of Guardian Capital Partners (GCP), Sure Fit, acquired a company named Patio Armor. Patio Armor offers covers for patio furniture, barbecue grills, and other outdoor products. Sure Fit is a provider of slipcovers and home solutions and has been owned by GCP since a buyout in December 2009.
If you visit their respective websites you will see why this deal is truly “complementary.” Sure Fit primarily manufactures slipcovers for indoor furniture. Patio Armor does the same but only for exterior furniture. So in one transaction, Guardian Capital Partners has combined two entities into one with a perfectly synergistic product and market fit. This is how Hugh Rovit, CEO of Sure Fit described it:
"The Patio Armor brand will immediately strengthen our portfolio of solution-oriented covering products for the home. This acquisition is an excellent fit with our stated growth strategy to expand our category leadership position through both organic means as well as synergistic, bolt-on acquisitions that (a) expand our product line with complementary brands and categories, (b) increase and extend our market penetration and (c) provide for sourcing, operational and distribution synergies."
Note the three areas emphasized in their acquisition plans – product line expansion, increased market penetration, and new sourcing/distribution opportunities. Normally if you can obtain one of these in an acquisition you will be happy. In this case it was a home run as the new entity will expand Sure Fit into new products and markets and provide new sources of goods.
These are synergies that many acquirers can only dream about. It would be a safe bet to assume that Guardian Capital Partners looked at hundreds of acquisition targets before settling on Patio Armor. And they must literally have been salivating as they went through due diligence and realized the extensive synergies that they would be able to obtain through this acquisition.
The key takeaway here for you if you are considering the sale of your company is this: Realize that in order to get optimal offers for your firm, you will need to clearly understand what motivates individual buyers – what they are looking for – and how your company can match those needs. This is not easy to do. But Generational Equity has written a whitepaper on the subject of buyer motivations and synergies. If you would like to learn more, please click here.
Another issue to consider is this: Many of you don’t have faith that there are buyers out there interested in your business. You simply don’t realize how the “off-balance sheet” assets that you have can be leveraged to create a win-win scenario for you with the right buyer.
If you would like to learn more, I would invite you to attend one of our free M&A workshops. While there you will be able to explore in depth about why your company might be a good acquisition target and the steps you will need to take to ensure you close an optimal deal when you sell.
And remember, there are hundreds and hundreds of buyers out there just like Guardian and Sure Fit. You just might be surprised who might be interested in your company.
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Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.Ralph Noblin, President of Noblin & Associates
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
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
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).Bil MacLeslie, CEO, ipHouse
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
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
We thank you Eric and Generational Equity making our dream come true.Larry Moore, Owner, A Company Portable Restrooms
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.
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 would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.Bil MacLeslie, CEO, ipHouse
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
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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
Generational Equity’s assistance was invaluable in compiling and marketing our business.Bil MacLeslie, CEO, ipHouse
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 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 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
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
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
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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
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
Michael worked tirelessly, He followed every lead meticulously and urgently to make sure nothing was missed.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 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
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
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.
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
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