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 News | Why did TASC Choose Them?Four years ago, the world looked at Lanier Industries' operations and saw a three year old machine shop with less than one million dollars of sales, negligible profits, negative net worth and one dominant customer. The Acquisition Search Corporation (TASC) looked at Lanier and saw a brilliant future. The founders of Lanier Industries recognized an opportunity in pins, machined steel components used in hydraulic excavators. Because the modern excavator was developed in Japan, the United States market is dominated by units imported from that country or made here by subsidiaries or joint ventures of Japanese companies. Both OEM and replacement pins were initially supplied by established sources in Japan. The few pins produced in the U.S. were made by small machine shops trading on existing relationships with a single excavator producer and without the foresight or resources to develop an industry-wide market. With demand for excavators at an early stage of development, the Japanese Yen rapidly appreciating against the Dollar, pressure on suppliers to satisfy the demands of just-in-time inventory management, lengthy shipping times from Japan and limited domestic competition, Lanier Industries saw an opportunity in a weakly defended, growing market. The founders also recognized that their personal objectives included liquidity and diversification, that the company would need access to additional capital to realize its full potential and that this would ultimately require the sale of Lanier. When they first began thinking about a sale, a friend suggested they speak with The Acquisition Search Corporation. The major obstacle to a sale was the need to realize a price not justified by historical financial results. Focusing on strategy rather than financial statements, TASC advised that sale be deferred and agreed to help management prepare for it. TASC valued Lanier and periodically updated the valuation so that the owners could monitor the narrowing gap between their expectations and the likely current selling price. We counseled them to broaden the customer base aggressively without changing the narrow product focus. We helped them to retain an auditing firm to assure the credibility of financial statements. We helped them choose the best time to seek a buyer, prepared a list of prospects, assisted them to draft an extensive descriptive memorandum to explain their unique business to those unfamiliar with it and recommended procedures for completing the sale without disrupting operations. We contacted prospects, generated interest and recommended those we believed most attractive to the sellers. TASC participated actively in negotiations, including the letter of intent and sale of assets agreement. We helped the owners to understand the value and other consequences of complex offers. We assisted them to structure counter-proposals that both achieved their liquidity objectives and enabled them to share in Lanier's bright prospects. When an offer was accepted, we guided the owners through the buyer's due diligence process, helping them to anticipate problems and assure closing of the sale. We were on hand at the closing to help handle any possible last minute issues. |
