How Rogerson Business Services Sold A California Portable Sink Manufacturing Business Quickly
Who They Are
In this instance, the business on offer was a mid-sized manufacturing company situated in the Bay Area, California, boasting a team of ten employees. Operating in the production of portable sinks for various markets, this factory reports several million in revenue, supported by strong cash flow.
At the forefront of this enterprise were husband and wife entrepreneurial duo, Joseph & Amy Mosis, who served as the primary points of contact for the business. This streamlined communication process proved advantageous for potential buyers, ensuring prompt and efficient responses. While Joseph & Amy enlisted the expertise of external professionals, the key figure facilitating the successful sale was their business broker, Andrew Rogerson.
The Challenge
When it comes to selling a business, the key lies in uncovering qualified and driven buyers. In this particular scenario, there was an overwhelming interest from potential buyers, with over 60 showing interest in just a span of 5 months. The next step entailed meticulously vetting this substantial pool to ensure they aligned with the financial expectations and other criteria set by the sellers.
Fortunately, due to Monsam Enterprises specializing in a particular niche product line, they were able to identify the perfect buyer from among the large group of interested parties swiftly. This led to a prompt closing of the transaction within the short timeframe of just 5 months on the market.
“I had a good conversation with Joe on 11/28/2023. Joe has a mobile sink business he built from scratch and is ready to sell and do some work to help at-risk youth in his home country of Egypt. Joe's a really nice guy.” Rogerson explains.
Escrow closed on May 22, 2024 with a successful transition from seller to the new buyer.
Andrew Rogerson signing off the deal by saying: "I’m delighted we were finally able to get escrow closed – as you could see, it was quite a team effort. The best part I think you’ll see from all of this is that Joe learned how to really behave himself…well almost.😊
Best of luck to you (Amy Mosis) and (Joe Mosis) as you travel the world to see a grandchild in London and travel to Egypt and hopefully other corners of the world."
The Acquirer
The anticipated level of scrutiny required for such a transaction might have seemed excessive, but it underscores the significance of having a robust business valuation and ensuring that your financial records are in order.
The buyer expressed contentment with the purchase price valuation provided by the business broker, Andrew Rogerson, of Rogerson Business Services based in Sacramento, serving business buyers and sellers based in California.
Despite the thorough due diligence conducted by the buyer, Monsam Enterprises had a pristine operational record with no legal or environmental concerns, facilitating a seamless transaction.
"The process from start to finish was rather swift. While it demanded significant time and effort, collaborating with Andrew and Joe (the seller) ensured a smooth flow," remarked Ray, (the buyer).
Continued by coining a 5 star review on the Rogerson Business Services Google Page:
"I recently had the pleasure of working with Rogerson Business Services to acquire a manufacturing business. Throughout the entire process, Andrew demonstrated exceptional professionalism, industry knowledge, and a genuine commitment to ensuring a successful transaction.
He was highly responsive and communicative throughout the entire process to ensure that all parties involved stayed informed and on track. This level of dedication expedited the transaction and instilled confidence in his ability to manage the complexities of business acquisitions.
I would highly recommend Andrew to anyone looking to buy or sell a business, as his expertise and commitment to client satisfaction are truly exemplary. Thank you to the entire team at Rogerson Business Services for their outstanding support throughout this process." - Calzar Capital.
The Seller
One of the key achievements made by the seller’s team was the expedited closure of the transaction, despite involving numerous professionals.
Mosis commented, "We had to engage more professional services than initially anticipated."
Despite facing a multitude of document and due diligence requests, maintaining a well-organized and methodical approach in each due diligence area and sustaining continuous communication with legal counsel and other professionals of the buyer enabled the transaction to progress efficiently from a business and documentation standpoint, said Mosis.
According to a survey conducted by Rogerson Business Services to evaluate feedback and experiences during the selling process, Andrew Rogerson, a Certified Business Broker in California, surpassed the seller's expectations.
"One of the aspects I found gratifying throughout this process is sharing our business insights with the buyer," Joseph Mosis expressed.
THE SELLING PROCESS
NEGOTIATIONS PHASE
California has lenient regulations when it comes to selling a manufacturing business, making due diligence easy; unlike other industries like construction to medical practices.
Factors that facilitated quick deal-making included access to a skilled workforce, compliance with environmental regulations, strong demand for the products, and established supply chain relationships.
The following are additional factors that involve the transaction of a due diligence phase:
- Established market presence
- Solid financial performance
- Intellectual property rights
- Legal and regulatory compliance
- Scalability and growth potential
During the due diligence phase, focus is placed on a thorough review and verification of financial documents, including balance sheets, income statements, and cash flow statements.
Furthermore, legal documents such as contracts, leases, and intellectual property filings are meticulously examined to ensure accuracy and completeness.
FINAL PURCHASE AGREEMENTS
The sale of Monsam Enterprises was a straightforward purchase of assets, a typical form of transaction. It involved essential elements such as the assignment of contracts, premises lease, indemnification, and escrow provisions for the purchaser's benefit, as well as working capital adjustments to the final purchase price.
This was simply a cash purchase, and confidentiality was paramount for the seller. He insisted on keeping the sale under wraps until it was certain, ensuring that all potential buyers signed a non-disclosure agreement (NDA) managed by the broker.
Maintaining confidentiality in the sale process is a fundamental practice to prevent potential disruptions to the business, employee turnover, and impacts on vendors and customers.
A definitive agreement is signed and the sale is final.
TRANSACTION MOVE TO THE ESCROW COMPANY
Rogerson Business Services has partnered with Glen Oaks Escrow, a third-party service that specializes in facilitating business ownership transitions for sellers and buyers.
This partnership is particularly essential in California, an escrow state where business sale transactions are required to be managed until they are successfully closed in escrow.
Here are the key takeaways:
- It is crucial to ensure that you have a comprehensive business valuation, and your business broker plays a vital role in this process.
- From the outset, it is important to be well-organized and prepared to undergo extensive due diligence.
- Responsiveness to seller requests is essential to keep the process moving smoothly.
- Building a strong team from the beginning is crucial, as selling your business is an endeavor that requires a collective effort.
By diligently following these key steps, you can significantly enhance the likelihood of a successful and smooth sale process for a manufacturing business in California.
DELIGHTED SELLER
Joseph and Amy Mosis, a couple from the Bay Area, California, who were selling their portable sink manufacturing business, were excited to embark on the next chapter of their lives and turn their dream into a reality.
"We enjoyed working with Andrew for his honesty and business integrity. He is very experienced, attention to details and made the process very clear and simple. Andrew as a business broker met and exceeded our expectations””
HAPPY BUYER
The purchaser of the manufacturing business was thrilled upon the official closure of escrow. He was handpicked by the seller for his exceptional characteristics. The buyer is committed to continuing and expanding the legacy.
"The buyer got approved for an SBA loan - it was the start of an exciting beginning to operate and grow a manufacturing business in California.”
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