Case Study: Business Valuation

Case Study: Business Valuation – Conveyer System Manufacturing

The Client

Conveyer System Manufacturing is operating in Phoenix Arizona supplying systems to the postal service, airports and shopping malls nationally. Three equal partners were managing the business with great difficulties as the partners’ personal plans conflicted with the company’s strategic plans. This was a source of discontentment among the owners and soon enough the business suffered.

The Barrier

The partners acknowledged the need for separation but were hesitant since they didn’t know the true value of the business. Lack of respect among the partners presented a challenge as they couldn’t see eye to eye in meetings and allowed their personal agenda to overshadow the day-to-day operations of the business. The company required a professional consultant to act as a moderator with technical knowledge in business valuation.

The Method

A series of facilitated meetings amongst the partners was the first step in clearly identifying personal goals & objectives. This was followed by a thorough business analysis encompassing financial and organisational settings.

BMF Consultants focus was on:

  • Identifying the partner’s issues and defining guiding principals for salvaging the partnership.
  • Thorough business valuations taking into account operating capital, business income & losses, capital assets and the businesses “good will”.
  • Providing strategic choices to the partners for either partnership continuation in harmony or a clearly defined exit strategy by three partners or a “buy and sell” agreement to each other.

The Outcome

BMF Consultants acted as a moderator and brought the partners together. We conducted a business valuation, presented a strategic choice to the partners and negotiated a “buy and sell” agreement and one partner bought out the other two partner’s share in business.

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