Maximizing Ownership Value for a Growing Contractor
The Situation
A minority partner in a construction company found himself at a crossroads. The majority owner had extended a buyout offer, and the implied EBITDA multiple of 1.5x seemed, on the surface, like a reasonable figure. Reasonable enough to accept without much pushback.
But the timing of the offer raised questions. The business was heading into its most productive stretch of the year, with substantially higher revenue and EBITDA anticipated over the next six months. If those numbers held, the valuation would look very different, and the offer on the table would as well.
With so much at stake, the instinct to move quickly and avoid added cost was understandable. But accepting the offer before understanding the full picture would have meant leaving significant value behind.
What We Did Together
We encouraged the minority owner to take a second look, not to create conflict, but to ensure he was negotiating from a position of knowledge rather than assumption. Our priority was to ensure he had the clarity to make an informed decision, whatever direction he ultimately chose.
What our research revealed changed the conversation entirely. Comparable companies in the same space were transacting at multiples far above 1.5x. The business was worth substantially more than the initial offer implied, and the data to support that case was clear.
We worked with the minority owner to build a comprehensive valuation that reflected the true financial picture, including the seasonality factors the original offer had not accounted for. That analysis gave him a credible, well-documented basis for renegotiation.
The Outcome
The revised ownership estimate came in at more than double the value of the original offer. Not because the facts changed. For the first time, all of the facts were on the table.
This is the work we believe in most: helping clients see what they could not see before, so that the decisions they make are ones they can stand behind with confidence.
I almost accepted the first number they put in front of me. hfco asked one question that changed everything. By the time we were done, I walked away with more than twice what I would have settled for.
Owner
Construction Company, New Jersey
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