There are a number of investment banks and M & A firms that specialize in small and mid-market transactions. These are usually in the $5M-$100M range but are often smaller and occasionally larger. Irrespective of the firm that handles the deal the most important factor is the skill and ability of the M & A professional or team actually on site and involved with it. Often, M&A firms, particularly investment banks, use these transactions as a form of on-the-job training for highly educated but inexperienced associates sometimes fresh out of business school. VR Business Broker professionals, on the other hand, have done hundreds, if not thousands, of mid-market M & A transactions and often have corporate inside M & A experience too.
David Schlegel, President and owner of the Jacksonville VR office, is one such professional. During his mid-market corporate career he has negotiated and put in place bank, venture capital and leveraged buyout financing. He led a private placement financing for newly formed Enviracaire Corp., later negotiated venture capital for its expansion, and then as CFO of both companies, merged it with Environmental Air Control, Inc (EACI) leading the valuation work, communicating with shareholders and obtaining fairness opinions. Five years later and after being elected a Director and assuming the position of Executive Vice President, COO & CFO of EACI, Mr. Schlegel played a key role in taking EACI to market and selecting the investment bank. He was the primary drafter of the confidential offering memorandum, participated extensively in all negotiations, and was the internal leader of all due diligence activities. The successful result was a complex multi-party transaction in which Honeywell Inc.acquired the Enviracaire Division for $25M, and Donaldson Corp. acquired both the Envirco Division and ENV Services, Inc for $5M.
At the same time Mr. Schlegel had been negotiating an immediate repurchase of Envirco via a leveraged management buyout from Donaldson Corp. Mr. Schlegel personally negotiated the purchase/sale agreement, as well as bank and venture capital financing to support the LBO. The transaction closed a month later with Mr. Schlegel and his team acquiring Envirco for $3M and establishing it as a new corporation.
Post-acquisition, Mr. Schlegel and his management team grew Envirco rapidly and increased profitability dramatically. Less than 3 years later Mr. Schlegel negotiated an acquisition of Envirco by NASDAQ Company, Trion, inc. for $11 M. This resulted in an 1100% return to Envirco shareholders and a huge return to the venture capital partner. Mr. Schlegel continued to grow Envirco and also became an officer of Trion, Inc. Trion engaged an investment bank to market it in 1999 by which time Envirco had become the fastest growing and most profitable part of Trion. Mr. Schlegel played a key role in the $55M acquisition of Trion/ Envirco by NYSE Company Fedders Corp. after which Mr. Schlegel decided to retire from corporate life.
Mr. Schlegel's broad experience in growing, financing ,buying and selling mid-market companies as well as managing the related negotiations, due-diligence and other facets of the M & A process make him uniquely qualified to serve mid-market M & A clients seeking to sell a business or divest a division.
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