You’ve had a long and successful run, and now you are considering selling your manufacturing business. Maximizing your return requires a unique blend of knowledge, process, resources and skill — as well as more time than you probably have while you’re running a thriving business.
This case study provides insights into the M&A process for manufacturing company business owners who are considering an exit and exploring the depths of the process.
The Seller
Global Flags Unlimited, a flags and flagpole manufacturer, had been locally owned and operated in Acworth, Georgia area by the original owners since 1989. They decided to retire and sold the business to Peter Mangal in 2018. Under Peter’s leadership, Global Flags Unlimited grew to become one of America’s largest suppliers of flags, flagpoles and accessories.
With grandchildren clamoring for Grandpa’s attention, Peter decided it was time to start a new chapter and sell the business. Having acquired Global Flags through Sara Burden and Walden five years earlier, he reached out again to Sara Burden to help prepare the company for a sale and guide the transaction to a successful outcome.
The Buyer
While marketing the sale, Walden principal, John Phillips, found an interested buyer in Search Investment Group (SIG), an acquisitions firm with experienced operating partners who manage day-to-day operations and keep successful businesses running seamlessly through an ownership transition.
“Search Investment Group works with senior executives who are interested in buying lower middle-market businesses,” says Phillips. “If one of these senior executives has an interest in a company, then the investment group works with that executive to purchase it.”
Walden had worked with SIG on previous deals, but it was crucial to meet the operating partner within the group, Alex Dulmage, who was leading the transaction to ensure alignment between both parties.
“[Mr. Dulmage] was interested in buying and had a positive perspective on working with the seller,” says Phillips. “He had experience and knowledge of manufacturing, with the leadership skills necessary to make this transaction successful. It was a very good match.”
Like Phillips, Dulmage is also a military veteran. Their service to the country added to the enthusiasm to get the deal done. “Global Flags Unlimited certainly had a patriotic bend to it, so he was very interested in the opportunity,” says Phillips.
Due Diligence
Due diligence is often the most challenging part of the M&A process. During due diligence, the prospective buyer independently verifies the company’s financial documents before finalizing the sale price.
The buyer wasn’t familiar with Global Flags’ existing accounting processes, which were accurate but unique and required some translation.
“You have to work through those different interpretations of the numbers. You might have a customer service representative who does billing, an accounting person who’s receiving payments, or folks in the warehouse doing inventory. All those different people are essentially managing smaller parts of the whole financial process, and those people are going to have different processes. When you start digging into a company, you’re going to find discrepancies,” says the Walden team.
SIG brought in an outside accounting firm to inspect Global Flags Unlimited. While this is a common practice, the exercise was difficult for Peter, who had always maintained exceptional accounting records and knew his books very well.
“It was painful to have somebody else go through and question every single item in his financial statements,” says Phillips, “but that’s a necessary part of the M&A process.”
Walden helped Peter prepare for the questions and conclusions related to the financial audit. As part of the process, Walden’s principals also connected him with accounting partners who assisted with sell-side due diligence.
The Sale
Both parties had been trying to close the deal before the end of 2023, but it briefly seemed like the deal was going to fall apart at the 11th hour.
“There are always challenges in the M&A process,” says Burden and Phillips. “Our perspective was, let’s not panic. We get through these problems all the time. Let’s just work our way through it. And we encouraged the buyer not to walk away from a perfectly good business.”
The sale closed just before New Year’s Eve, and Peter was able to start a new year and a new chapter with a clean slate. SIG also enjoyed a successful ownership transition.
“We prevailed because we had calm heads and kept everybody focused on working together to complete the transaction,” says the Walden team.
| SELLER Statement | Global Flags Unlimited “We are excited as SIG forges ahead with a new strategic team. This transition provides us with partners whose goals align with our aggressive growth initiatives and will provide resources for rapid expansion and sustainability. Walden Businesses and Sara Burden have been the consummate partners in this process. Their industry knowledge and sage advice helped us find an ideal partner and led to a quick transaction process. We are excited indeed about our future.” |
| BUYER Statement | Search Investment Group “As the buyer, I had the pleasure of working closely with John and Sara, who exemplify Walden’s commendable expertise and commitment to excellence. Guided by their strategic acumen and personalized approach, they were able to keep the process moving and ensured maximum value for all parties involved. I confidently recommend Walden Businesses for their professional and successful handling of this transaction.” |
Are you concerned that selling your business could be an emotional transaction? Connect personally with John Phillips or Sara Burden to discuss, or complete the form below.
