Case Study

Case Study 3: Divesting a Company Division

Undisclosed Seller has been acquired by Jacobs & Thompson
Stillwater Capital acted as exclusive advisor to Undisclosed Seller

Situation:

A Toronto, Ontario-based family-owned company, over 100 years old, was in the third generation of ownership. In their 2011 strategic plan, the company’s management team decided that their Industrial Foam Division was no longer a core business and wanted to divest the industrial foam operation by early spring 2012. By fall 2011, their management team had taken some steps to divest the division but had made no real progress. They then hired Stillwater in mid-November 2011 to handle the divestiture of this division.

Solution:

With an aggressive timeline in mind, Stillwater ran a competitive bid process to sell the business and contacted top foam conversion businesses in Canada and the USA. By early February 2012, a draft letter of intent (LOI) was received along with other expressions of interest. After 6 weeks of negotiations, primarily addressing the continuity of employees, the LOI was finalized mid-March. The transaction was completed April 30, 2012, just 5 months from start to finish. The company’s Industrial Foam Division was acquired by Jacobs & Thompson (J&T), a leading Canadian competitor. Toronto, Ontario-based J&T is the market leader in industrial foam products. This transaction was a perfect strategic acquisition for J&T, and released the seller’s management team to focus on their other divisions.


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