Q&A with William Bundy

What services do you offer?
The Bundy Group advises family businesses and other owners of privately held companies on how to create value or exit their smaller middle market companies, while also serving as the intermediary in M&A transactions. Please explore our website (www.bundygroup.com) to gain a better understanding of the services we provide.

What size of business do you typically represent?
We target the lower middle market, which represents companies with revenues between $1 million and $100 million.

Does your firm focus on a particular industry or sector?
We have experience across a broad section of industries, including general industrials (manufacturing, transportation, and distribution), business services, financial services, healthcare, technology and retail / food and beverage.

What geographic region does your firm cover?
Our target geographic market is the Southeast and Mid-Atlantic United States.

Tell us about a difficult-to-close transaction.
One of our more challenging transactions involved an asset intensive business where the market value of the company’s assets was greater than the company’s value as determined by the company’s earnings and the multiple of Purchase Price / EBITDA. The seller’s logic for basing his price on the value of the assets was that he could liquidate the company and obtain the value he desired. The buyer’s position was that the earnings stream coupled with the “market” Purchase Price / EBITDA multiple resulted in a value less than the seller’s value expectations. Ultimately, the issue was resolved by an incremental earn-out amount paid to the seller on a performance-based formula.

Describe a memorable transaction.
One such transaction involved a large construction equipment manufacturer. One of the buyers we were in discussions with was a private equity group who had the financial and strategic assets to put the transaction together. However, they did not have an operational person to run the company on a day-to-day basis. Another buyer we were in discussions with had the operational skills to run the business, but he did not have the financial ability to put the transaction together. We introduced the buyers to each other, and they were able to establish a partnership that enabled this $77 million transaction to close. We recently offered this same solution to a healthcare business we represented. We believe this demonstrates our creativity, strong industry relationships, and focus in guiding our clients to a successful outcome.

Have you ever saved a client of yours from a fraudulent buyer?
We are pleased to report our screening and buyer diligence process has prevented our clients from experiencing a fraudulent buyer.

What is a common misconception that you find among your clients?
Often business owners feel too rushed to prepare their business for the selling process. If you want to maximize your company’s valuation, we recommend that you begin preparations at least one to two years before initiating the sales process. Things you should do ahead of time include maintaining detailed books and records (including audited financials), developing a written company strategy that highlights how you plan to maintain and grow the company and lastly, establishing a relationship with an experienced M&A advisor.

What have you found to be the single largest factor in getting the highest price and terms for your client?
A clearly defined and executed company strategy complemented by an effective sales process will attract the strongest group of buyers, which in turn will create an environment where maximum value will be created for the client.