The majority owners of Security Door & Hardware Co. and Security Builders Supply Co., Ron and Russ Benson, had built and grown the two family-held businesses all their lives. Now, ready to retire, the Benson brothers were looking to sell. They hoped to find a new owner who would be a good steward for the businesses, one who would care about their employees and continue the legacy of the two companies.

As longtime accounting clients of Wipfli LLP, the owners decided to engage affiliate Wipfli Corporate Finance Advisors LLC (WCF) to advise them through the M&A sale process, ultimately tasking the WCF team with finding the “right” buyer.

Strategy

Every WCF sale process is unique and fully customized in an effort to maximize the outcome for the sellers. To begin this sale process, the WCF team invested time upfront to learn as much as they could about the two businesses, enabling them to create a focused buyer list and ensure that all of the best potential buyers were approached and given an opportunity to purchase the businesses.

Once the buyer list was finalized and approved by the owners, the WCF team created the marketing materials that would be distributed to the potential buyer group. These materials included a Teaser and Confidential Information Memorandum (CIM). The Teaser was a one-page document that outlined the transaction opportunity and key investment highlights of the two companies on a “no names” basis.

If, after reviewing the Teaser, a potential buyer was interested in learning more, they executed a Confidentiality Agreement (CA) and received the CIM. The CIM contained additional information on the two businesses, covering everything from detailed historical and projected financials to company history and business operations.

The CIM provided potential buyers with enough information to submit a first-round bid, called an Indication of Interest (IOI). After receiving multiple attractive offers, WCF summarized the proposals, helping the business owners compare each offer.

After careful consideration, the owners and the WCF team selected the group that would advance to the “next round” of the sale process. During this next round, WCF provided additional information to the buyers in a secure virtual data room, coordinated site visits and facilitated meetings between the potential buyers and the management of Security Door and Security Builders.

As potential buyers continued to evaluate the acquisition opportunity, they provided very detailed diligence request lists. This presented a challenge for the sellers, as the two businesses had limited managerial capacity and accounting resources to address these items. The WCF team was able to overcome this challenge by leveraging the Wipfli accounting team’s expertise and acquired knowledge of the two businesses. The two Wipfli teams worked closely together to respond to buyer requests in a timely manner and alleviate the burden on the management teams of Security Door and Security Builders.

After receiving a Letter of Intent (LOI) from the preferred buyer, WCF advised the owners on how to move forward. Once the LOI was executed, WCF coordinated the confirmatory due diligence process, helped negotiate the final purchase agreement and drove the transaction to a successful close.

Results

Security Door and Security Builders sold to Central Indiana Hardware (CIH) on April 17, 2020. The competitive dynamic of the sale process was instrumental in maximizing the outcome for the shareholders. Ownership was pleased not only with the final purchase price but also with the knowledge that they found a buyer that would take care of the businesses and long-time employees moving forward.

“Making the decision to sell our 74-year-old family-owned businesses wasn’t easy, but when we decided to move forward, Wipfli Corporate Finance proved to be the best partner. They helped us navigate each step of the sale process and were heavily involved in managing everything from buyer due diligence requests to negotiating the final purchase agreement. WCF’s high level of involvement limited the burden of the sale process on our management team, enabling them to continue running the businesses.”

Russ Benson, former owner, Security Door & Hardware Co. and Security Builders Supply Co.

Client profile

Security Door & Hardware Co. and Security Builders Supply Co. are divisions of Central Indiana Hardware, Inc. (CIH), a leading specialty distributor of Division 8 commercial door systems, Division 10 accessories and operable partitions, and Division 28 access systems integration. Prior to the sale to CIH, Security Door and Security Builders were divisions of Bradley, IL-based Security Lumber, a premier supplier to leading contractors in the Chicagoland area.

Testimonials: The persons providing the testimonial(s) herein have experience with our services. Their respective experience with RKCA, Inc. and WCF may not be representative of all other Clients. Testimonials are not paid for by RKCA, Inc. or WCF. Testimonials do not constitute a guarantee of future performance or success related to any product, transaction or service.

Investment banking services provided by RKCA, Inc., Member SIPC/FINRA, 1077 Celestial Street, Cincinnati, Ohio 45202. Phone: 513.371.5533. Certain Wipfli Corporate Finance Advisors, LLC associates are registered representatives of RKCA, Inc. Wipfli Corporate Finance Advisors, LLC is a subsidiary of Wipfli LLP. Certain accounting, tax, business advisory, and other services are provided by Wipfli LLP. RKCA, Inc. does not provide accounting, tax or legal advice. Investing involves the risk of loss. Past performance is not indicative of future results.