Many successful business sales begin years before a company ever goes to market.

That was the case with Apex Resource Technology, a highly specialized manufacturer serving the medical device industry. Our relationship with the owner began not with a sale, but with a business valuation. As he considered retirement several years down the road, he wanted to understand the value of his company and begin preparing for an eventual transition.

Approximately eighteen months later, a major customer expressed interest in acquiring the business, and the owner engaged George & Company to represent him in negotiations. After updating the valuation and financial analysis, a transaction structure was negotiated and the parties entered due diligence.

Then an unexpected challenge emerged.

A significant customer relationship ended abruptly, impacting both Apex and the prospective buyer. The result was a substantial decline in EBITDA and the transaction was no longer viable.

While disappointing, the situation reinforced an important lesson that many business owners face: customer concentration can significantly affect business value and buyer confidence.

Rather than abandon the process, the owner took action. Drawing on decades of industry experience, he pursued new business opportunities in Europe and successfully rebuilt revenue. As performance steadily improved, George & Company continued confidential marketing efforts to identify additional strategic buyers.

The company’s specialized expertise ultimately attracted the attention of another strategic acquirer. With more than thirty years of experience working with bio-composite resins and implantable medical device applications, Apex occupied a unique position within a highly specialized market segment.

A strategic buyer in the medical manufacturing industry recognized that value and structured an agreement to acquire the company once financial performance returned to previous levels.

Just over a year later, that milestone was achieved. The transaction closed at a valuation exceeding six times EBITDA, and a long-term facility lease was negotiated to help ensure continuity for employees and customers alike.

KEY TAKEAWAYS FOR BUSINESS OWNERS

Preparation Matters

The process began with a valuation years before the eventual sale, giving the owner time to understand risks and prepare for a successful transition.

Customer Concentration Can Impact Value

Dependence on a small number of customers can significantly affect both valuation and deal certainty. Identifying and addressing these risks early can improve outcomes.

Persistence Creates Opportunity

When the original transaction collapsed, the owner continued building the business rather than settling for a less favorable outcome.

Strategic Buyers Look Beyond Financial Statements

Apex’s specialized expertise, industry reputation, and technical capabilities ultimately proved as valuable as its financial performance.

The Right Outcome Isn’t Always the First Outcome

Successful transactions often require patience, adaptability, and a willingness to navigate unexpected challenges along the way.