We are ecstatic! We just closed the sale of one of our million dollar listings. This regional trucking business is located in Fontana, CA. They operate 30 tractors and 60 trailers in California, Nevada, & Arizona. Although this transaction, from initial listing to closing, took 14 months (our average time to sell a business is 9 months, given the size of this transaction and the chaos that ensued from Covid-19 …. 14 months was a huge success)– we had activity from start to finish. We took our time in creating a sales plan for this business.
Key Characteristics of this business that we knew would help us eventually close a sale:
- Very well established and operating for over 20 years
Buyers are looking for established businesses. This one has been in business for over two decades.
- Great books and records
We partnered with their CPA to make sure their financial statements and tax returns were accurate and up to date.
- We pre-approved this business for SBA financing.
We spent the time and effort to get a green light from two banks wiling to finance the acquisition of this business. All we needed to do was find a qualified buyer.
- Willing, cooperative, and realistic seller.
We have to admit, this was an ideal seller. He knew it was time to sell, but wasn’t in a hurry. He was realistic about everything: pricing/valuation, the time it took to find the right buyer, agreeing with a lengthy transition and more.
- Business is successful, profitable, and frankly survived Covid-19
Covid-19 did throw a wrench in this transaction. The pandemic happened mid escrow with a highly qualified buyer and the bank decided to stop funding all loans! SBA was focused on the PPP and EIDL programs, and wasn’t processing any acquisition loans in the weeks following the quarantine.
The Business itself, did stop moving freight, but after the dust settled, it seemed to be business as usual. Freight needs to get places, and the pandemic actually ended up sealing the deal. In the eyes of the buyer, if Covid-19 couldn’t bankrupt this business, it has to be a solid investment.
- Our team never gave up
I have to give some credit to our great team. In the end it wasn’t a bank that financed this deal. The structure of this deal was very creative. The most creative I have seen in my career as a business broker. It involved a stock sale, a seller carry-back, equipment lease and loan assignments, A/R financing, a buy-back option, and of course some cash from the buyer. Bottom-line … if this deal was in the hands of a less capable brokerage team, it probably would not have happened.
This transaction was definitely one for the books! On to the next close.
If you are thinking about selling your business, give us a call. We offer free and confidential consultations and business valuations. Contact one of our experienced business brokers today. Call 1-800-Biz-Broker