1+1 = 3. That's the "plus factor" of business acquisitions. Unfortunately, the synergies that come from acquiring two or more companies don't benefit you as the seller. Instead, the buyer pays you "1" and puts the 50% premium in his pocket.

Alliance Equity changes that formula. How? By putting the selling companies together ahead of time. Gathering similar companies into one strategic package gives us the leverage to persuade acquirers to pay "3." So you, the seller, put the added premium in your pocket.

That's just what we did with the Brown Production and MIW Aerospace companies.

Perceiving the Potential

As its name implies, Brown Production is a production machine shop. The company, whose primary customer is Boeing, manufactures parts for new aircraft. Since its revenue relies directly on Boeing's cyclical production schedule, it's no wonder a competitor of ours had so much trouble finding a suitable buyer for Brown. In fact, the other firm left quite a bad taste in owner Russ Koppes' mouth.

Enter Alliance Equity. We understood that Brown Production was a top-notch shop but that the market was consolidating, making it more difficult for Brown to compete. We also knew that Brown Production's Boeing concentration would be a serious concern to any buyer. The solution: To enhance Brown's potential value by creating a "package" with Brown and a companion company.

Building Relationships to Build Value

Over a period of time, we built a relationship with Russ and his son, Monte. Thanks to their trust in us, and our knowledge of the marketplace, Russ agreed that the best option was to continue the effort to sell the company. Our greatest challenge was to find a complementary company to "package" with Brown.

Fortunately, we had already been working with another aerospace supplier, MIW Aerospace and its owners, Chris Kirsop and George Gibboney. MIW also concentrated on Boeing, but in a different area. This company manufactures spare parts for planes that are no longer in productionóan exact counter-cyclical balance to Brown Production.

Getting Results

At Alliance Equity, our first task was to put together a joint marketing package describing the potential value of the two companies combined. Soon Russ, Monte, Chris and George began to see an increased interest from acquirers. With the heightened value of the consolidation synergy, we found several buyers willing to pay a premium for the companies.

Enjoying the Fruits of Their Labors

How are the four company owners enjoying their profits? Russ will soon retire to his 1,000-acre horse farm in Montana, where he will enjoy his passion for training show horses. George will work for another year, then plans to build a high-performance kit airplane.

The other two owners, Chris of MIW and Monte of Brown Production, stayed on. They are already seeing increased opportunities from the new combined company. They are also building a retirement nest-egg, and diversifying their financial position, by putting some of their profits into non-aerospace investments.