Full-Service Auto Repair & Tire Shop: Third-generation business including two buildings successfully sold to individual buyer

Location

Fall River, MA

Industry

Automotive-Related

Business Broker

Ed Burkhart

Situation

This third-generation family business was a highly regarded staple in the community. The business was partially owned and operated by the son, while the father was a retired owner living in Florida and no longer active in the auto-repair and tire shop’s operations.

The son had grown up in the business and was ready to sell. Like many businesses, staffing was a challenge and was compounded by fewer people entering the trades. With a young family and other income-producing business interests, he sought to pursue other interests and stop working six days a week. He wanted an experienced business broker and found BayState Business Brokers and Ed Burkhart, with his extensive experience in the automotive industry, via an online search.

BayState Business Brokers’ Approach

Burkhart began the packaging of this full-service auto repair and tire shop business with a prominent location. The business was marketed to exclude the two properties affiliated with the shop as the owners sought to lease the use of the buildings and retain ownership of the real estate. The son owned one of the properties and the father owned the other. With tire sales being the primary source of revenue, initial marketing efforts secured interest from both strategic buyers and individual buyers.

Quickly a buyer was identified; an individual buyer who had purchased other businesses through BayState Business Brokers.

The price was agreed to including purchase of the tools, machinery and all associated aspects of the business contingent on an environmental survey. A walk through was successful, due diligence was minimal and the final details were coordinated by Burkhart to bring the transaction to a close.

Results

With the environmental survey completed, the terms of the deal were negotiated to include the buyer leasing both properties at a favorable rent with the option to purchase in five years. As the final details of the transaction were being completed, including transfer of the city use permit to function as an auto repair shop, the buyer offered to prepay the five-year lease to purchase both properties. While the sellers did not initially want to sell the two buildings, they agreed to the prepayment terms and the two properties were sold with the business. Transition occurred at the time of the closing as the buyer brought in his own team to run the business while the mechanics and other key staff members remained working at the business.