Case Study 1
Background: ProManufacturing Inc., a $22M revenue custom injection molding company, had built strong relationships with automotive OEMs over 15 years. When approached by Industrial Holdings Corp, CEO George Harrison provided basic financial statements but failed to document the company’s most valuable assets.
The Undocumented Value: Harrison’s data room contained financial statements and basic legal documents, but missed critical intangible assets:
Customer relationships: 15-year exclusive supply agreements with major OEMs, never formally valued
Proprietary manufacturing processes: Custom tooling designs and quality control procedures, undocumented
Technical expertise: Engineering team’s specialized knowledge in automotive-grade materials, no formal documentation
Quality certifications: ISO 9001 and automotive industry certifications, treated as routine compliance rather than competitive advantages
Initial Buyer Valuation: Industrial Holdings’ preliminary offer was $18M (0.82x revenue), based purely on tangible asset analysis and basic EBITDA multiples. Their valuation model couldn’t price what wasn’t documented or presented professionally.
Professional Asset Identification: Harrison engaged a Chartered Business Valuator to conduct proper intangible asset documentation:
Customer Relationships: Discounted cash flow analysis of exclusive contracts revealed $4.2M value based on:
Historical customer retention rates (96% over 10 years)
Premium pricing sustainability due to switching costs
Multi-year contract stability and renewal probabilities
Proprietary Technology: Relief-from-royalty method valued custom processes at $2.8M:
Cost savings versus standard manufacturing methods
Quality advantages reducing customer defect rates
Time-to-market improvements for customer product launches
The Transformed Valuation: With professional intangible asset documentation, Industrial Holdings revised their offer to $28M (1.27x revenue), a $10M increase. The purchase price allocation showed:
Tangible assets: $12M
Customer relationships: $4.2M
Proprietary processes: $2.8M
Other intangibles: $1.5M
Goodwill: $7.5M
Lesson Learned: Harrison’s initial approach left $10M on the table by failing to identify and document intangible assets that buyers couldn’t value without professional presentation. The documentation process didn’t create value—it revealed value that already existed but was invisible to buyers.
Case Study 2: CloudSync Technologies - The Always-Ready Advantage
Background: CloudSync Technologies, a $5M ARR cloud backup solutions provider, exemplifies the “always-ready” approach to business sale preparation. CEO Jennifer “Joe” Walsh maintained sale-readiness continuously, not because she wanted to sell, but because she understood the strategic advantage of optionality.
