Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
Sally Macut and Kathy Brown Zerwas employed their high-powered corporate backgrounds when setting out to buy a business. They closed April 1 on the purchase of Designer Sign Systems in Blaine, a $3-million maker of signs with about 20 employees.
Macut was the first woman director at Northwest Airlines, and was VP of operational control there in the 1980s. Zerwas was head of mergers and acquisitions for Donaldson and then group controller for Northwest Airlines. Both were subsequently involved in venture capital financing for start-up firms.
So when the colleagues agreed it was time to buy their own business, they did it by the book. “We did benefit from our corporate experience,” Zerwas says. “We put together a business plan book,” with five years’ worth of detailed financials.
Before they began looking for a purchase, starting 1 1/2 years ago, they spent hours discussing their criteria and writing it down.
Criteria were broken into several categories, including financial performance and deal structure (they didn’t want a company so big that they had to bring in outside investors). They added short bios and their pictures, and sent it out to business brokers.
“We made a favorable impression,” Zerwas says. “We moved out of the business broker contact realm and started working with attorneys and accountants.”
Greg Loeschke of Lingate Financial Group, which represented the sellers in the deal, calls their approach impressive. He says it’s not a negative that the two have never owned a business before. “Everybody with an entrepreneurial bent has to start someplace.”
Macut acknowledges that new debt for the company demands revenue growth. “When we first met the employees, we said ‘We’ve got one thing the other owners didn’t have, and that’s debt,’” Macut says.
Zerwas adds they didn’t project dramatically faster growth rates, and they’ll cut their own salaries if needed. “We left ourselves some wiggle room,” Zerwas says.
Greg Loeschke, Lingate Financial Group: 763.546.8201; www.lingate.com
Sally Macut, Kathy Brown Zerwas, Designer Sign Systems: 763.784.5858; sa*********@**********gn.com; ka**********@**********gn.com; www.designersign.com
