Label Company's Successful Acquisition Strategy

About the Company:
We were retained by LABELCO to assist with identifying acquisition opportunities (buy-side representation). We successfully acquired ADD-ON-CO as a result of our work together. In this case, the selling company was a packaging and label business that was in a moderate degree of financial distress as a result of having lost a key customer. Our client, LABELCO, acquired the assets of the label division.

ADD-ON-CO was a valuable strategic acquisition for purposes of more than just revenue accretion. The company had a presence in a previously unpenetrated market segment and catapulted LABELCO into a desirable opportunity with a new manufacturing technology, Digital Printing.

Challenges:
One of the notable challenges of this transaction was earning and retaining the seller’s trust throughout the process. ADD-ON-CO had a strong track record of success, and the selling owner was sensitive to the risk of being taken advantage of due to the financial condition of the company.

Actions:
The trust we built with the seller established the necessary confidence for them to divulge information about their real concerns, even though we were the intermediary and were not representing them in the sale. In turn, we were able to help them get comfortable bringing their concerns directly to the Principles at LABELCO. Our ability to get the parties to trust each other diffused what could have been deal damaging issues.

Results:
After two years, LABELCO and the former owner of ADD-ON-CO maintain a strong working relationship, resulting in cross-selling opportunities for each party.