Deal Story: Selling a Twofor

After more than three decades in business, Mike and Natalie Murray were finally ready to sell their two companies and transition into retirement. Knowing the sales process can be difficult without guidance, they decided to enlist help and interviewed several brokers to find the right fit. Ultimately, they chose to work with our agent, Robert Warrick. The conversation flowed easily and they were impressed by his openness, responsiveness, fairness and expertise.

The companies, Court Shoppe and Ada’s Gift Shoppe, are both gift stores located in Class A office buildings. They were recently remodeled and looked beautiful. The equipment was functioning well, the fixtures were excellent, the inventories were well merchandised, and sales were trending up. The only difficulty was the financials. While both businesses were profitable, the record keeping had not been modernized. Old ways of balancing the books were still prevalent, there were no P&L’s or balance sheets, and accounting software wasn’t being utilized.

“Understandably, manual journals and hand-written notes don’t necessarily go over well with banks,” says Robert Warrick. “We had to manually convert the written financials into a digital format for bank underwriting and the SBA loan process.”

Although the process was laborious, the owners were extremely helpful and responsive. Ultimately, they were able to recreate three-years of P&Ls and balance sheets, a rolling 12 forecast, and a business plan. Everything was now set for a premium sale. Then COVID hit.

“While profitable, strong businesses were still able to command a premium price during COVID, the pandemic was rough on the retail industry,” says Warrick.  “Although buyer sentiment was diminished as a result of the pandemic, these were still solid businesses that were profitable pre-COVID, and still interested potential buyers.”

Calhoun Companies vetted many buyers to ensure that they would fit Mike and Natalie’s needs. Ultimately, the right fit was an individual with small business experience and a good profile of hard work, desire and technology savvy that would help them be successful as the new owner. Robert was there to guide Mike and Natalie through the sales process during a once-in-a-lifetime pandemic, helping them make adjustments and ultimately structure a deal that included a two-location discount and SBA financing optics.

Robert quarterbacked the deal for both parties, spending a lot of time supporting the buyer in addition to helping the sellers. The deal ultimately brought together Hellmuth and Johnson to prepare the closing documents, Village Bank for the SBA loan, two landlords, and both landlord’s attorneys.

With that many players involved as well as a rapidly approaching deadline for SBA Disaster Relief, Robert’s experience and professionalism was crucial in working with the lawyers, bankers, and landlords to make the deal happen. It took roughly 60 days from singing the Letter of Intent to the closing of the deal, which was finalized just the day before the SBA Disaster Relief deadline.

“This deal proved that through many twists and turns, lowlights and relentless conversations, perseverance is the key to success,” adds Warrick. “Anything can be done if you really try to help others.”

Now that the deal has been closed, Mike and Natalie are happily moving on to the next phase in their lives. They’re looking forward to sleeping in, enjoying a less stressful life, and travelling when they’re able to.