THE DIVESTMENT CAMPAIGN
Our Client – The Vendor
Edington Agencies is a specialist provider of high quality, globally sourced electric motors and power transmission products that it supplies as part of best practice solutions to the HVAC and industrial service & replacement markets. Customers who rely on the Business for HVAC applications include HVAC contractors and wholesalers, electrical wholesalers and general electrical contractors; while customers who rely on the Business for industrial applications include small OEMs, manufacturers and engineering contractors. Run under management with a small team of highly-skilled staff, Edington’s long-term strategy of combining technical expertise with an extensive product range and high customer-service standards has earned the Business its undisputed position as the leader in the Queensland market.
In 2018 Edington’s director engaged Johnsons Corporate as specialists in the sale of mid-sized businesses to undertake a strategic divestment campaign on his behalf. Having established and grown the Business since 1991, he thought the timing was right to pass ownership to a strategic suitor, who could best lead the Business through its next stage of growth.
The Business Sales Strategy
As a long established business with a track record of consistent revenue growth, this represented an attractive opportunity for a strategic acquirer. In addition to being run under management, Edington also featured strong supplier relationships, a long-standing customer-base, experienced management, and a highly skilled workforce. Looking forward a new owner could leverage these into multiple growth opportunities, including: interstate expansion; extension into related HVAC product categories; and/or enhanced distribution through the development of an ecommerce channel(s) to the trades market.
Johnsons Corporate’s custom research & marketing focused on commercial enterprises in the directly-related HVAC, Electrical Component, and Power Transmission supply segments, as well as the broader industrial product sector. It also took into account related markets – including Electrical contractors and Hydraulic Component distributors – as well as a shortlist of potential financial buyers. Johnsons ran a proactive direct marketing campaign that uncovered +15 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 10 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 Australian Financial Buyer
Aldridge Capital is an Australian investment company, based in Sydney, that holds multiple industrial businesses in its portfolio. The acquisition of Edington Agencies served to further diversify its holdings.
What Our Client Had to Say
"From our first meeting and preliminary discussions, I felt confident that Johnsons Corporate possessed the expertise and overarching process to manage the divestment of Edington Agencies. In particular, they invested significant time to understand the business, which enabled them to effectively represent the business right throughout the divestment process... Whilst the negotiations involved some complexity, Johnsons demonstrated a level headed and calm approach, whilst always maintaining enough momentum to finalise the transaction."David Edington, Director - Edington Agencies