1. Sale of Midwest Retail Services Presentation by Ken Pritchett
Selling a Business
Sale of
Midwest Retail Services
Presentation by Ken Pritchett

2. Background Started working for Streater Store Fixtures in 1984
10 years later I decided to start my own company

3. Today 15 years old 15 Employees Represent 25+ Manufacturers
$5 Million in sales

4. Thoughts on Selling Reasons why I should sell Reasons not to sell
Tired of the responsibility of being the owner
Lost the passion and drive to run the business at its best
Fairness to the employees
Fairness to the business and to myself
Reasons not to sell
My Family

5. Decided to sell (What did that mean?)
No Broker
No Acquisition
No big time consuming process
No disruption of business
No secrets and gossip around the office
Seamless Transition
Employee Protection
Easy Transaction

6. Who was I going to sell to
Our sales rep from our 2nd largest supplier
Been in our industry for 10 years
Had been calling on our company for 5 years
I felt he was the perfect fit and had the ability to do the job and the deal

7. My Plan
What I felt I needed in the way of money was in the same ballpark as what I felt the company was worth
Made an outline of what it would take to retire
Confirmation that this made sense…..Dinner with Tim Gase
Contact my prospect………Lunch with Matt Ray
Presented my intent

8. The Process 5 years of company tax returns
5 years of personal tax returns
Several questions along the way

9. The deal itself 20% down payment 10 years of monthly payments
Interest on the financing
Employee contract to age 65 for health insurance
Sign 10 year lease to stay in my building
Closed on December 30, 2008
My cost was about $10K
Committed to help and mentor in any way I can

10. Acquisition of Midwest Retail Services Presentation by Matt Ray
Buying a Business
Acquisition of
Midwest Retail Services
Presentation by Matt Ray

11. Buying a Business Personal evaluation Professional valuation
Assembling an advisory team
Financing
Keys to successful sales

12. Purchase Structure 20% down payment Cognovit note with 10 year term
Life insurance to guarantee loan
10 year lease in current building
Consulting contract with owner
Sizeable working capital (defined amount) left in business
Accounts Receivable, Inventory, & Cash
Accounts Payable zeroed out (seller’s resp.)

13. Personal Evaluation Long term personal fit?
Ten years of experience within the industry
Hands-on working experience with prospective business and staff
Full spousal support
“Chicken Little” economic environment

14. Professional Valuation
Hired professional valuation firm
$3,000 Fee
Acquired financial data from owner
Determine if asking price was fair market value

15. Advisory Team Professional valuation firm Accountant Attorney
Asset versus Stock purchase
Assisted in acquiring financing
Attorney
Specializing in small business & acquisitions
Financial Planner
Company retirement program

16. Financing Down payment financing SBA loan option Small local banks
Denied due to rules involving seller’s future participation in business
Small local banks
Ongoing banking requirement

17. Keys to Successful Sale
Familiarity of all parties involved
Owner’s willingness to share information
Owner financing long term note
Quality support team for both parties
Open communication between buyer and seller

18. Buying & Selling a Business
Midwest Retail Services
Ken Pritchett & Matt Ray