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550 Deal Update: January 2016 Edition

January 13, 2016 at 1:01 PM

RECENT TRANSACTIONS

"Industrial Inspection & Analysis Acquires Leading 3D Inspection Firm QC Group"

Sunbelt represented QC Group as their exclusive sell-side advisor.

Minneapolis, MN - Industrial Inspection & Analysis, Inc., a platform company of investment firm Sunny River Management, announces acquisition of Minnetonka based QC Group, LLC.

Industrial Inspection & Analysis, Inc. has increased their capabilities in dimensional measurement, first article inspection, reverse engineering and 3D scanning with the acquisition QC Group, Inc.

Established in 1986, QC Group specializes in providing expert engineering, quality and inspection services to precision manufacturers. The company serves manufacturers in a variety of industries including medical, aerospace, defense, transportation, and power generation.

David DeVowe, General Manager and a former owner of QC Group, said, "We're pleased that the company is now part of the larger and better capitalized organization that Industrial Inspection & Analysis is building. It is important for our employees to grow and continue to service our customers as their needs continue to evolve."

QC Group's advisor, Dan Mulvaney, of Sunbelt Business Advisors, oversaw the transaction process that focused on marketing the business to strategic buyers in the metrology industry.

Said Dan, "As manufactured products become more defined with tighter tolerances and specs, QC Group is well-positioned to service their precision manufacturing customers as the expert's expert. David and Dan built an impressive company focused on providing each customer consistent story-worthy service. II&A is well-positioned to help QC Group increase its national footprint and provide top-quality service to more customers."

Financial details of the transaction were not released.

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"Focus on the Value Drivers"

The value of your business should be estimated by an outside party at least once per year. Think of it as an annual check-in on your future financial health. And we can help.

Our analysts will incorporate 2015 financial results into our pricing models, updated with current market data on transactions in your industry.

The resulting estimate of your company's market price is a way of keeping score - but also a report card on what is working to increase value and decrease the gap between current value and the owner's target exit price. Value drivers such as:

Increasing topline growth. Muster all the tactics to keep sales rolling in!Reducing customer concentration. Diversify that customer base!Reducing the company's reliance on your presence. Get the right people in place and transfer knowledge and relationships to them!

These actions increase a company's market position and its value because they assure acquirers that management has built something to last, something that has a solid future.

They also happen to be the consensus Top 3 value driving actions that our M&A dealmakers advise for business owners looking to increase value in 2016.

Market price expectations increase when there is a reduction in risk to the future cash flows of the business. More certainty about good future cash flow leads to an increase in market value.

Thinking about what increases certainty leads to the meaningful Value Drivers in the business. When we sit down with the pricing estimates at an annual check-up, we're going to ask this question: What are the things that management can do something about that will increase the marketplace of buyers' confidence in the company's ability to maintain and grow its cash flow?

Our Q1 calendar is filling with annual check-ins with CEOs and business owners for whom we provide periodic pricing intelligence.

There are other value drivers and we'd be happy to discuss them with you. Let us assist you in monitoring your progress toward your target selling price.

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ACQUISITION OPPORTUNITIES

Search for Acquisition Candidates

Sunbelt Business Advisors is representing a Midwest manufacturing company seeking acquisitions meeting certain criteria in manufacturing, distribution, or services. This Company has a record of innovation and reputation for quality that has kept them a market leader for more than 100 years.

Acquisition criteria:

  • $5 to $100 million in sales
  • Cash Flow over $1 million; a unique or high growth business may justify a smaller size
  • Strong industry fit in providing high quality goods & services

Our client has:

  • Capital to close transactions,
  • Realistic market-based valuation expectations, and
  • A strong people culture with traditional values of hard work and honest dealings

Email Sr. Analyst Len Washko at lwashko@sunbeltmidwest.com or reach him at (612) 238-1287 for further inquiries.

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Full Service Water, Fire, Storm Damage Mitigation & Restoration Contractor

Asking Price: $5,400,000

Annual Revenue: $5,000,000

Annual EBITDA: $1,200,000

This highly profitable privately held company:

  • Is staffed by experienced & motivated operations, marketing, and insurance professionals
  • Is a preferred vendor to major property insurance companies in the greater Twin Cities market
  • Services both residential and commercial markets

Bank financing is available to highly qualified buyers.

Email Advisor Jim Borthwick at jborthwick@sunbeltmidwest.com or reach him at (612) 238-1465 for further inquiries.

ID# 1-1614

 



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Category: 550 Update