Purchase Agreement Accepted at 100%, New Business Acquired in Compressed Timeframe

The Client

DS Mechanical

Measurable Result

In 6 short months, an established plumbing and HVAC business was under new ownership. Due to SVA’s due diligence, the asset purchase agreement was accepted at 100% - eliminating any negotiations and additional costs while saving valuable time.

The Story

Dave Stone had a mission - he wanted to own his own business. As with any good businessman, he investigated his options looking for the right fit in several industries including manufacturing, service and construction. In May of 2010 he found “the one”, but unfortunately, talks with the owner abruptly ceased. A few short months later he learned the owner of 30 years, had recently passed away without having a succession plan in place and the family wanted to sell. Dave reached out and the transaction began to swiftly take shape.

Dave had been introduced to SVA Principal Marty Mathias through a mutual colleague during his initial search for a business and contacted Marty to assist with the transaction.

“I am comfortable with most aspects of negotiating and evaluating, but Marty proved to be a valuable sounding board, bringing clarity and insight to situations where my vision was blinded,” commented Stone.

The SVA Acquisition Engagement Team led by Marty; conducted a full financial review, helped determine a fair asking price, and reviewed the letter of intent. Working directly with his attorney, SVA helped diminish any unclarities in the financials.

“Relationships between accounting and legal can become embattled,” added Stone. “They are intertwined and often difficult to separate. SVA’s expertise became self-evident so much that accounting and legal became parallel forces moving towards a common goal.”

The due diligence and attention-to-detail of the SVA team became apparent in the “true-up” process. Because Dave had agreed to purchase both accounts payable and accounts receivable, there was a “settle-up” phase in the closing process before the final transaction could be determined. Based on the clarity and thoroughness of SVA’s asset purchase agreement both attorneys and the seller took the numbers SVA provided at 100% with no negotiation, eliminating any additional costs or investment in purchasing the business.

“I do not think I would own the business I bought in February 2011 without SVA’s Acquisition team,” concluded Stone.