12/01/2023
How a private equity firm made a seamless transition to a new President taking over for retiring owner-operators with legacy relationships.
EXECUTIVE SUMMARY:
A private equity firm purchased a $10m millwork business from 2 retiring owner-operators. The exiting owners held all customer, vendor, and employee relationships and the PE firm wanted them involved in the hiring process to ensure a seamless transition.
Misura Group recruited a leader with a proven history of success integrating acquisitions and driving organic growth.
The result: Within 1 year, both owners have exited the business and the new President increased sales by 40%, from $10m to $14m, and EBITDA is up from 10-14%. They are poised for growth with a pipeline of potential acquisitions in the market.
THE CHALLENGE:
SEAMLESS TRANSITION
Our client is a private equity firm that purchased a $10m millwork business providing pre-hung doors, trim, and windows with an installed sales offering, in a major metro market. The exiting owners were retiring and having operated the business they held all relationships with customers, vendors, and employees. The PE firm wanted to keep the owners involved in the hiring process to ensure a seamless transition.
GROWTH OBJECTIVES
The new president would need to bridge the previous owners’ relationships, while driving organic growth objectives and integrating new acquisitions in the market. The culture of the business was positive and upbeat, but the employees lacked exposure to the P&L and therefore how their actions impacted those numbers.
OUR SOLUTION:
NETWORK OF INDUSTRY RELATIONSHIPS
Misura Group leveraged our existing network of relationships with top talent in the millwork industry to recruit an individual who had millwork experience across all channels – manufacturing, distribution, and direct to general contractors.
PROVEN HISTORY OF SUCCESS
The professional had a proven history of success growing sales volume, reducing operating expenses, and implementing continuous improvement processes in a variety of business models focused on prehung doors, trim and hardware.
THE RESULTS:
FINANCIAL IMPACT:
Within 1 year of hiring the new President, sales have grown from $10-$14m and EBITDA has increased from 10%-14%.
With the success of this President, the PE firm has developed a pipeline of potential acquisition companies in the market.
CULTURAL IMPACT:
Both owners have exited the business with a seamless transition. The new President implemented financial reporting at production, delivery, and sales level leadership, introducing metrics-driven compensation to the business model. A new sales training academy was developed to help the team focus on selling the value and not price.
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