SAT Civil Constructions Pty Ltd (“SAT Civil”) operates as a specialist road stabilisation contractor from premises near Beaudesert, Queensland. Established in the mid 1990’s by a German based road recycling company, SAT Civil was acquired by Jan Weinert and Veronica Cooper in a management buy-out in 2001.
A subcontractor for government bodies and major Australian construction and infrastructure companies, SAT Civil’s projects have included involvement in resurfacing the Sydney Harbour Bridge, Gold Coast Indy track as well as numerous projects throughout Queensland and northern New South Wales.
After a number of years of moderate success, the company had experienced significant growth in turnover and profitability in 2011 and 2012, particularly as a result of reconstruction efforts following the major flooding events in Queensland.
In mid 2012, Jan and Veronica received an offer to acquire their interest in SAT Civil. The potential purchaser was a New Zealand based group who operated in the same industry and was looking to increase its exposure to the Australian market.
Although experts in their field, the shareholders did not feel they possessed the necessary skills and experience to negotiate the sale transaction and its associated issues. With Veronica looking towards retirement and Jan considering other business opportunities, both were concerned about maximising the net proceeds of any sale and ensuring their employees were looked after.
THE PILOT SOLUTION
After hearing of the shareholders’ concerns, a close family friend of Veronica who was the Chief Financial Officer of an existing Pilot client, suggested meeting the Corporate Advisory Division of Pilot.
“We were very excited about the opportunities the sale offered us, but we were just not sure how to make it happen” said Veronica. “With so much potentially at stake we were not comfortable with the idea of negotiating contract terms, liaising with lawyers and dealing with the tax issues that would arise as a result of the sale. It was a big relief to be able to have Pilot representing our interests and guiding us through the transaction.”
Neither Jan or Veronica had been involved in the sale of a business before. Both of them had an idea of what they wanted to get out of the deal, they just did not know how to make it happen. Just like any business owner, they also wanted to maximise their return after all their hard work.
After discussions with Jan and Veronica it was agreed that Pilot was to be given a wide brief. The firm’s role in assisting with the transaction encompassed:
- Liaison with existing external accountants;
- Referral to and ongoing liaison with legal representatives;
- Negotiation of terms relating to the sale of business, lease of premises and shareholder employment contracts;
- Advice relating to structuring of deal to maximise net sales proceeds;
- Settling of Heads of Agreement and Sale of Business Contract;
- Management of due diligence process – legal, commercial and financial;
- Attending to transfer of excluded assets including premises and vehicles ;
- Management of process towards settlement;
- Finalisation of company income tax returns for the 2011 and 2012 years;
- Negotiations and calculation in relation to amount of earn-out dividend.
Pilot’s involvement in managing the sale process meant that Jan and Veronica could keep their focus on the core activities which had made them so successful and thus attractive to the prospective buyer.
After a period of negotiation and due diligence the transaction settled in late 2012.
Much to the delight of Jan and Veronica, the net sale proceeds received exceeded their initial expectations and enabled them both to achieve their respective financial objectives.
“We are more than happy with the outcome of the sale process and we realise that we would not have been in this position without Pilot’s advice and assistance. As I said at settlement, I’ll be back at Pilot when it is time to sell my next business”.
Following settlement, Pilot have continued to assist Jan and Veronica through referrals to bankers and financial planners as well as attending to their ongoing taxation and accounting needs.