THE DIVESTMENT CAMPAIGN
Our Client – The Vendor
Eastern Automation (“E-Auto”) is a niche provider of fluid power and process control solutions to a select mix of blue chip customers, who span the transport, water, construction, manufacturing, waste and petrochemical industries among others. Headquartered in Melbourne and with long-established factory infrastructure in China, the Business primarily operates as a manufacturer-supplier of premium hydraulic & pneumatic equipment – with its NATA testing accreditation offering customers the assurance of fully certified products. In Australia, E-Auto resells its own OEM products along with leading 3rd party brands as replacement or upgrade components used in the maintenance & repair of industrial equipment. It complements that offering with value-added services that range from engineering design to assembly & commissioning to maintenance contracting.
Positioned as an alternative to a traditionally labour-intensive in-house approach to maintaining operating stocks of fluid power equipment, E-Auto’s replacement-exchange business model has proven attractive to industrial customers while also generating strong margins. In 2018, after operating the Business for +20 years, E-Auto’s director sought a new owner to take over leadership of the firm and assist in executing strategies to capture multiple untapped opportunities for growth. As a specialised mid-market business broker, Johnsons Corporate was engaged to undertake a multinational divestment campaign on his behalf.
The International Sales Strategy
For a buyer, E-Auto represented a highly profitable business with deep customer relationships and high levels of repeat business as well as a significant pipeline of contracted works. Well-diversified, the Business generated both domestic & export revenues and balanced product sales with recurring income from service exchange and maintenance contracts.
Johnsons Corporate’s custom research & marketing focused on the global fluid power engineering sector – both major services providers and product distributors. Secondarily it identified Australian operators in closely related sectors including providers of diversified engineering services, industrial & mining services, and plant & asset maintenance. Johnsons ran a proactive direct marketing campaign that uncovered 17 qualified, interested parties. Further vetting and negotiations resulted in the selection of a preferred buyer as well as a backup buyer, with Offer and Acceptance secured within 12 weeks of going to market.
(Read more about how using a Specialised Mid-Market Business Broker Approach to selling your business could get you a better outcome – just like our client).
The Strategic Trade Buyer
Founded in WA and headquartered in Sydney, H.I. Fraser Group is a growing professional engineering organisation that operates multiple subsidiary companies. Together they specialise in niche hydraulic, pneumatic and vacuum system design, build, supply, maintenance and certification. For the Group, this acquisition has extended its geographic footprint into Victoria, while also expanding its hydraulic offering.
What Our Client Had to Say
"Johnsons were very effective at creating a level of market interest in our business, but also navigating the presentation, preferred suitor selection, and transaction negotiation process. They were committed to the project from start to finish and I would not hesitate to recommend their services to any other business owners considering a divestment."Craig Medhurst, Director - Eastern Automation