Private Equity Sponsored Truck Dealership Sells within Months, Meeting Owners’ Timing and Price Requirements
A heavy truck dealership with a multistate footprint was preparing for a sale when the CFO left for another opportunity. The company had recently turned profitable after the 2008-09 recession, had been in the PE firm’s portfolio for several years, and was the last investment remaining in the fund. This created a sense of urgency for a sale, and the need for an incoming CFO to get up to speed rapidly. The company was complex, with seven lines of business including new and used truck sales, parts, service, leasing, rentals, and financing.
The newly hired CFO, now a NextLevel team member, moved quickly to become knowledgeable about all key facets of the company’s financial position, resources, and procedures, then toured all locations to meet with operations personnel as well as key supplier leadership. With a deeper understanding of the business, and with the annual budgeting process just two months away, the CFO worked with the company’s analysts to develop an interactive budgeting/forecasting model. The PE firm accepted the proposed budget and immediately engaged investment bankers for the upcoming sale. The CFO then adapted the forecasting tool to develop a credible five-year financial projection for inclusion in a confidential information memorandum that played a key role in management presentations to prospective buyers.
After only a few months, a qualified buyer was engaged in exclusive negotiation, and the CFO led the sale process through due diligence and the quality of earnings process to a successful conclusion. Even though the company’s owners had prioritized speed of sale in this case, the company was sold in the acceptable range of EBITDA multiples for this type of company.