TECH AIR ACQUISITIONS: What if You Could Cash Out and Still Keep Playing?
You’re nearing retirement and your financial advisor keeps urging you to cash out and diversify. That’s an option; but suppose you’re not ready to just walk away. You spent a lifetime building your business — maybe even generations — and you need to know that your family, employees and customers will be taken care of.
Welding & Gases Today sat down with Tech Air CEO Myles Dempsey Jr., who has come up with an innovative solution for allowing distributors to remain in the game by inviting them to partner with Tech Air.
How does it work?
Myles explained: “For example, suppose you have a distributorship for sale at $10 million. With a Tech Air partnership, you could pull out a given amount of cash, say $9 million, and then take the remaining $1 million and invest it in a partnership with Tech Air. This allows you to sell your company while gaining equity in Tech Air, which has grown from less than $20 million in sales to approaching $200 million in 7.5 years.”
What are some of the advantages of this acquisition process?
Diversifying Wealth – “Most owners have 80 to 90 percent or more of their total wealth tied up in their businesses,” Myles said. Partnering with Tech Air allows them to cash out and diversify their portfolio, and then reinvest a portion in the Tech Air family of companies, providing further risk reduction. “Tech Air is growing at a rate of 35 percent compounded annually,” Myles noted, “and that equity will likely appreciate faster and is more diversified than equity in a single, smaller company.”
Continuity – “Our strategy is to retain the entrepreneurial spirit that allowed the small business to succeed in the first place,” Myles emphasized. “We keep the owners involved in operating the company and we know their employees are the ones who service the customers, so we keep most of them too.” This continuity extends to the Tech Air management team as well. In fact, most of Tech Air’s regional managers are former owners who now have an equity stake in the company.
The Burden of “Administrivia” – If you ask any small business owner to name their biggest hassle, they will probably mention drowning in administrative tasks and paperwork: HR, safety, compliance with EPA, DOT and OSHA regulations, legal, accounting, benefits, training — Tech Air offers corporate-level support for all of these functions so that business owners can go back to doing what they do best, serving customers.
Opening Doors to New Product Lines – “Many small distributors have reported that access to all product lines can be a problem,” Myles said. “For example, they may be a Miller distributor, but they can’t buy Lincoln directly, and a lot of small companies can’t get full access to Hypertherm. Joining the Tech Air family of businesses opens doors to all of these product lines.”
Funding for Capital Expenditures – “Small distributors aren’t always willing or able to make large capital investments to fund growth,” Myles pointed out. “We are aggressive on capital investments, so our partners can benefit from the expansion they might have been hesitant to risk as a small company.”
Do sellers have to become partners in Tech Air?
No. For business owners who want to exit straight to retirement, Tech Air offers a full buyout option. ν
To discuss an acquisition or partnership with Tech Air, contact Myles Dempsey for a confidential, no-obligation evaluation at 203-731-8981 or [email protected]