Wholesale / Retail Appliance Business: BayState Business Brokers completes deal to sell an appliance retail business to an online buyer.
East Granby, CT
West Springfield, MA
Business BrokerBrian Labonte
Business owner wanted to sell his appliance retail business. After firing another business broker who did not work out, the seller found BayState Business Brokers via an online search. Business Broker Brian Labonte leveraged both his retail expertise and local market knowledge to work with the seller and position the business for sale.
BayState Business Brokers’ Approach
A valuation of the business was prepared for the owner and reviewed as an initial starting point for marketing the business. Labonte developed the BayState Confidential Brief, our version of the industry’s Confidential Business Review (CBR). In this market with higher interest rates, the Brief was shared with two banks for an opinion on pricing and terms to validate the positioning of the business in the market. Both banks affirmed the valuation and term sheets.
As is often the case when brokering the sale of a business, there may be industry nuances or other factors that affect finalizing deal terms and securing financing. In this situation, an industry buyer group would need to approve the buyer of the business. Additionally, there were existing business relationships between the business being sold and another business that was a significant customer of the business. The bank wanted assurance that the customer relationship would continue under a new owner. In addition to being a major customer, the business paid significant management fees for services shared with the appliance retailer; the bank wanted assurance that the arrangement would continue after the sale.
Through an online search, an individual buyer seeking to buy another business found the business listing on BayState’s website. Brian Labonte quarterbacked the process for the seller and buyer to meet, and for all parties to meet including the attorneys to move the deal along including securing financing and negotiating the terms of the deal.
Securing financing was a lengthy process as the buyer worked with a local bank who was not a SBA preferred lender. The bank required a recent valuation of inventory which the seller was able to provide including accounting for sold inventory being held for customers and contractors, inventory on hold with deposits made and inventory available for sale. Inventory was in two locations and in a separate warehouse.
While the buyer initially sought to purchase the business at a discount, the valuation and terms sheets reviewed by two other banks substantiated the asking price that Labonte had determined. After a year of discussions and conversations, the seller achieved his goal of selling his business at the asking price and was able to agree to a transition period to help the new owner get up to speed so he could move on.
What Our Clients Say
I would like to compliment Baystate Business Brokers and more specifically, Brian Labonte for a job well done in evaluating, marketing and working through the sale of my business. It was my first time selling a business and I was unaware of the process. Brian Labonte did a terrific job in explaining and communicating each step of the way. I highly recommend BayState Business Brokers and Brian Labonte for anyone considering selling their business.