- Business Services & Industrial
- Entrepreneurial & Family-Owned
- Mergers & Acquisitions
- Strategic Advisory
Customized Approach to Marketing Three Unrelated Businesses
An 80-year old diversified industrial services company seeks to liquidate its portfolio
When Republic was introduced to Transco Inc., the “Company” was comprised of a railcar repair division (Transco Railway Products Inc.), an industrial insulation products division (Advance Thermal Corp.), and a metal products division (Transco Products Inc.). The Company was owned by multiple families that were no longer involved in the businesses.
Different approaches to market
Selling a company with three unrelated businesses
Determine the optimal way to achieve liquidity and maximize shareholder value in a tax-efficient manner, taking into account the time, transaction expenses, corporate cost structure and the shared services provided at the corporate level.
Republic evaluated the opportunity and valuation implications of selling the Company in its entirety to one buyer and concluded that there was not an optimal buyer for the Company; the shareholders would realize greater value by selling the businesses separately.
Republic Partners' Role
Discreetly testing the market for a business that is potentially difficult to sell
Republic and the Company initially focused on the smallest business, Transco Products Inc., which despite having a large installed base, leading market share, and dominant brand, was anticipated to have limited appeal to acquirers due to its involvement in the nuclear industry.
Republic recommended contacting the top domestic and international strategic buyers discreetly to gauge potential interest. After a series of meetings, it was clear that continuing to operate and grow Transco Products Inc. would maximize its value to the Company’s shareholders.
Preparation leads to a successful broad auction
Transco and Republic then focused on the second largest business, Advance Thermal Corp., a business with significant customer concentration, an older management team, and no obvious potential acquirer.
Republic implemented a broad sale process, approaching approximately 150 potential buyers, including strategic, private equity, and family organizations. Republic also invested a significant amount of time preparing management for meetings with potential buyers and analyzing data to address customer concentration issues.
Result: The broad auction process for Advance Thermal Corp. resulted in a successful sale of the business to Brock Holdings, a portfolio company of American Industrial Partners, in April 2018.
A targeted process leads to another successful transaction
After completing the transaction for Advance Thermal Corp., Republic proceeded to advise the shareholders on Transco’s “crown jewel,” Transco Railway Products Inc. Republic implemented a targeted process, approaching fewer than 20 potential buyers who understood the rail industry and were comfortable with the cyclicality of the rail market and the Company’s complex manufacturing environment. Republic created detailed analyses on each of the business’s eight locations and proactively addressed issues that it expected potential buyers to raise.
Result: The targeted process for Transco Railway Products resulted in a sale to the Union Tank Car Company, owned by Marmon Holdings, a subsidiary of Berkshire Hathaway, in May 2019.
A customized approach maximizes shareholder value
The broad auction process for Advance Thermal Corp. resulted in a successful sale of the business to Brock Holdings, a portfolio company of American Industrial Partners, in April 2018.
The targeted process for Transco Railway Products resulted in a sale to the Union Tank Car Company, owned by Marmon Holdings, a subsidiary of Berkshire Hathaway, in May 2019.