THE DIVESTMENT CAMPAIGN
Our Client – The Vendor
Torque Industries is a diversified engineering company offering total solutions primarily to customers who use hydraulic and pneumatic machinery. Based in Adelaide SA and operating from 3,000 sqm office & warehouse premises, Torque Industries comprises 3 divisions: Torque Hydraulics, IPS Automation and Hydra-Pac Waste. The Business generated revenues of $14M+ with approx. 20% EBIT margins and 35 staff servicing a broad range of industries including: agricultural, aerospace, exploration, industrial, marine, mobile, mining and materials handling. The Business designs and supplies turnkey solutions to both small and large companies across Australia as well as internationally to the USA, India, UAE, Korea, Vietnam and Singapore.
Established in 1985 under different ownership, the current three shareholders had further developed the business both organically as well as through acquisitions. They now sought an exit to focus on other business interests and required a new owner to take the Business through its next growth cycle. Torque had previously undertaken a sale process via a corporate advisor (on a selective basis). Although mild interest was generated, no deal eventuated. This time around they sought a different approach, and appointed Johnsons Corporate as specialist mid-market business brokers to assist with their objectives.
The Business Sales Strategy
Torque Industries represented an attractive acquisition opportunity for a strategic buyer. It held a strong market position, offered multiple growth opportunities, had experienced management and staff, diversified revenue streams, a loyal & diverse customer base, robust MIS, exclusive supplier agreements and a broad range of in-house technical capabilities.
Johnsons Corporate’s custom research & marketing went beyond the obvious Hydraulic Engineering space to also incorporate Diversified Engineering, Industrial Automation, and Industrial Services Providers as well as selected private equity & financial buyers. Johnsons ran a proactive direct marketing campaign that multiple 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 ASX-Listed Trade Buyer
ASX-listed Coventry Group Ltd provides industrial solutions to the mining, construction and manufacturing industries. At the time of purchase Coventry was turning over $150M via 4 industrial divisions with locations across Australia and New Zealand. The acquisition of Torque Industries aligned with Coventry’s strategic objectives to grow revenues and earnings.
What Our Client Had to Say
"Prior to engaging Johnsons, we had retained the services of a traditional corporate advisor and went to market (on a selective basis). Although mild interest was generated, no deal eventuated. [A year later] we approached Johnsons with a view to running a different process... The direct marketing campaign generated interest from over 50 companies. Johnsons then screened & qualified these and within 10 weeks we had signed Offer & Acceptance with the [eventual] purchaser. In the end we sold... at a valuation and on terms all three shareholders were happy with."Leigh Thompson, Director - Torque Industries