An endoscopy manufacturer from the Midwestern United States seeks to acquire endo-component manufacturers with $2.5-20 million in revenue.
After many successful years of manufacturing components and assemblies used by endoscope repair organizations and OEMs, we are looking to expand by acquisition. We do not believe in highly complex transactions and look to invest our own money to acquire quality firms and provide them the capital to grow. Our philosophy is to focus on creating value through the following channels:
• Focusing on investing for long term growth
• Developing innovative products of the highest quality
• Collaborating with established customers
Target Definition
The firm is seeking to acquire a company that manufactures optical or CMOS components used by endoscope manufacturers and repair organizations. Criteria are as follows:
Size: $2.5-20 million in revenue (10-100 employees)
Location: North America or Western Europe
Preferences: A broad portfolio of products is a plus. Prefer firms with engineering as well as manufacturing capabilities.
Proposed transaction structure
The firm is seeking to acquire majority control of a components manufacturer and then invest growth capital to maximize value over a 7-10 year period. Invested capital could be directed at new product development, sales & marketing, recapitalization of the balance sheet, or follow on acquisitions. Within these overall goals, we are flexible in tailoring a transaction that makes the most sense for the seller. Possible transaction structures to which we’re open include:
- Cash buyout of 100% of business
- Purchase of majority stake with owner retaining minority stake and benefiting from future growth
- Earnouts or other condition compensation enabling seller to further benefit from growth in future years
- Working with seller to grow his professional future within our organization into leadership roles
How we would like to work together
The first step in this process is for our banker to reach out to prospective sellers and confirm their interest in starting a discussion on the possibility of sale. If this could be of interest, then upon execution of a non-disclosure agreement we will get to know each other and see if there is a potential transaction that could make sense to all parties. Typical steps in this process after signing the NDA are:
- Information request from us
- Preliminary phone call to discuss key valuation parameters
- Indication of interest from us to prospective seller
- Prospective seller meeting with the firm
- Letter of intent with exclusivity executed by both parties
- Due diligence and closing