Client case study / Sell-side M&A
He already had four offers when he called us.
He also had no intention of leaving the business. That made choosing the right partner every bit as important as the terms, and neither one was going to sort itself out.
Closed July 2026 · Electrical testing and field services · Founder-owned, 20 years
Offers in hand at engagement
$8.75M
Highest offer in hand at engagement. Four signed letters of intent, several more parties circling.
Transaction closed at
$15M
No escrow. Rollover at the owner's discretion. Working capital peg unchanged.
Market launch to close
~4 months
About six weeks to reach agreement. Three more months to reach a closing.
01 · The situation
Our client spent twenty years building an accredited electrical testing and field services company. Recurring preventative maintenance for national telecom carriers, hyperscale data centers, and Fortune 500 industrial accounts across roughly seventy customer sites.
Then the data center build-out arrived, and his phone started ringing. Private equity platforms and industry strategics were calling constantly. By the time a mutual contact introduced us, he had four letters of intent in hand, the highest at $8.75 million. He was close to signing one.
His hesitation about hiring an advisor was fair, and we have heard it often. I already have the buyers. Why pay someone to do what is apparently already happening?
We were direct with him about price. We could not promise a number, because nobody honestly can, but we could promise a competitive environment. Competition does two things at once. It improves value, and it improves the odds the deal closes at all. A buyer who knows he is the only option negotiates very differently in month three than a buyer who knows he is not.
The larger issue was fit. He wanted to roll equity and stay at the helm for several more years, which meant he was not only selling a company. He was choosing who he would be working alongside for the next chapter of it. A partner misaligned on culture or on appetite for growth would cost him far more than a turn of multiple. Finding the right one mattered as much as the terms did.
So the commitment we made was narrow and honest. Get him a deal done, get him in front of enough of the right partners to make a real choice, and be the ones absorbing the work.
02 · What we did
We underwrote the business first. Normalized the financials, built the confidential information memorandum, and documented the story: the recurring maintenance base, the accreditation moat, the national account relationships, the technician bench.
Then we ran a process around the buyers he was already talking to rather than replacing them. All four stayed at the table, joined by a small number of additional qualified parties we knew belonged there, seven in total. Everyone under NDA, everyone with identical information, everyone on the same deadline. No favorites and no games, which is the only way a process like this holds up.
Because he intended to stay, we ran the fit questions alongside the economics: growth plans, capital appetite, how much autonomy he would hold after closing, and how each buyer's existing operators described being owned by them. The buyer he ultimately chose had been in his original group. The terms were not the ones originally on the table.
Consideration
Cash at close
No seller financing
Escrow
None
Rollover equity
Owner's election
Chose about 10%
Earnout
Two years, on EBITDA
Catch-up if year one misses
Working capital
Our original formula
Unchanged
Post-close role
Continues to lead the business
03 · What diligence found
The reason this engagement mattered.
Reaching agreement took about six weeks. Reaching a closing took three more months, and this is the part of the engagement we would point to first.
Four diligence teams covering financial, tax, IT, and insurance and benefits worked through a twenty-year-old, founder-run company alongside counsel on both sides. What they found was not the product of anyone cutting corners. Most of it was unforeseeable before diligence began, and several items were news to the owner himself. Each one below was a live risk to the transaction. Each one, we worked through with him.
Employment matter
An employment matter from before the sale process surfaced mid-diligence, and it was the most serious threat to the deal. Left open, it could have stopped the transaction. We engaged specialized counsel, documented precedent and industry practice, worked through the resolution steps, and produced a full exposure analysis until the buyer could underwrite it.
Workforce documentation
Several skilled employees held visa classifications that did not authorize U.S.-based work, a distinction most owners have no reason to know. We identified the classifications, brought in special counsel, and handled remediation and disclosure on our terms rather than letting it be discovered.
Potential ownership dispute
A prior key employee had a long-standing informal arrangement with the owner that raised questions about a potential ownership interest, the kind of ambiguity that can cloud title and give a buyer cause to walk. We averted the issue by properly documenting the former arrangement and obtaining a formal sign-off from the prior employee, removing the cloud before it became a deal-stopper.
S-corporation election integrity
Three separate threads: whether the original election was validly and timely filed, whether historical distributions had been disproportionate, and whether a former third partner complicated the record. A broken election meant seven-figure back taxes, and a buyer who wants the company but cannot cleanly close on it. We coordinated the CPA, tax counsel, and the buyer's advisors, and evaluated an F-reorganization to address structure and rollover mechanics.
Two dormant affiliated entities
A legacy entity created years earlier to protect the company's accreditation revenue mix, holding only cash, and a second entity formed but never operated. Both had counsel-prepared disclosures and a clean pre-closing treatment.
Owner compensation normalization
Years of owner and family payments booked as operating expenses. We built and sourced the schedules line by line so the buyer's questions were answered before they were asked, and so the owner was never caught flat-footed on his own financials.
Customer concentration and backlog
One large contract underpinned the projections and the backlog the valuation rested on. Rather than let concentration risk discount the whole enterprise, we negotiated a two-year earnout measured on EBITDA, with a catch-up provision, so a soft first year could still be earned back in the second.
Any one of these could have ended the transaction, reset the price, or left the owner personally exposed after closing. None of them were visible on the day he nearly signed an $8.75 million letter of intent by himself.
We did not promise him a bigger number. What we gave him was a process that made a better outcome possible, a competitive field that made a better outcome likely, and the backing to see it through when the hard part arrived.
John Bruckner, Partner · The McFarland Group
If there is an offer on your desk
We are not going to tell you your LOI is a bad one.
It may well be a good one, and we would have no way of knowing otherwise from the outside.
What we would say is this. If you are planning to stay on after closing, who ends up on the other side of the table will shape your next several years as much as the check does. And regardless of whether you are staying, the months between signature and closing are where deals get retraded, where undiscovered issues become leverage, and where owners who went it alone wish they had not. That is the work we do.
Whether that means running a full process or simply helping you get a deal across the finish line, we are glad to have the conversation.
The McFarland Group advises privately held business owners on sell-side M&A, buy-side acquisitions, transferable value, and pre-transaction planning. Details of this engagement have been anonymized. The company, its owner, and all bidders are unnamed at the client's request.