- Number of Shops: 4
- Revenue: $16.5mm
- Location: Albuquerque, NM
- Age of Business: 42 Years
- 40% improvement in offer value from lowest to highest bid
- 3-week time to market to take advantage of immediate market opportunity
Brothers Adam, Daniel, and Andrew Quanz bought out their father’s interest in the family body shop and quickly grew it to four locations — the second largest MSO in New Mexico. With more than 20% annual growth, the business needed more space and more capital. So, they reached out to our team at Focus Advisors for strategic advice about their expansion alternatives.
“We knew we wanted to sell at some point, but our focus was to continue to grow. We originally worked with Focus Advisors to get our financials lined up. Our business is our retirement — so if and when we did decide to sell, it had to financially support four different families.”Adam Quanz, CEO of Quanz Auto Body
Engaging Focus Advisors
After a confidential introductory call, Focus Advisors performed a financial analysis and reconstruction — uncovering several impactful cost-saving strategies and helping Quanz improve its EBITDA. We also modeled several expansion alternatives, including a greenfield shop and acquiring a fifth location.
“They looked at our financial data and pulled out what they knew would be relevant. We had discussions on how our paint contract was structured, and they implemented a strategy to make that contract more profitable.”
Our analysis revealed that these expansion alternatives would significantly improve EBITDA in approximately two years. However, it was around this time that the company began facing increasing headwinds: With COVID changing the behavior of the labor market and insurer pressures increasing, it became more difficult to maintain their profit margin.
The Quanz team began to consider selling the enterprise rather than expanding it. They had been approached by consolidators interested in buying before, but weren’t encouraged by the valuations — so they asked if we could advise on the value of the business. We provided Quanz with a range of values — informed by our market intelligence of national and regional buyers, their interest, and recent valuations. Ownership determined that the time was right to sell.
“The business was doing really well. But finding people was getting harder, wages were increasing like crazy, and we didn’t know what the tax situation would be with the new administration. So, we decided to give it a go. I knew people who had used Focus Advisors, and I knew we didn’t want to go it alone.”
Our Process & Approach
Fortunately, the work we had already done to reconstruct their EBITDA paid off. Building quickly on our analysis over the prior 18 months, we were able to quickly synthesize all of the information we’d gathered and crafted a 55-page Confidential Information Memorandum (CIM) in less than three weeks.
“Focus Advisors understood how to make our company more attractive. I may have highlighted things differently if I didn’t have them helping me. They understood all the different aspects of our business that buyers would be looking for.”
We then leveraged our deep industry knowledge and relationships to develop a targeted plan for approaching the most likely bidders while preserving confidentiality for Quanz. Because they wanted to take advantage of immediate market opportunity, we established a clear offer date — ensuring we received the best offers from the start. Most importantly, we made it clear from the outset what the owners’ goals and priorities were in the transaction, so we could solicit offers that were designed to meet them.
“We discussed with Focus, what’s our end plan, what do we want to get out of this deal? There were factors beyond the sale price. Who did I want our employees to work for? What type of benefits package do they offer? That was all just as important as the deal itself. They knew who would be looking and who would be a fit for our business.”
Thanks to our rapid facilitation of the due diligence process, we received three letters of intent — then negotiated with the two leading bidders to conclude the deal in less than three months from the date we took Quanz to market.
“We hand-picked companies based on who we thought had the potential to give us the best offer. We had offers from all of them within a week. It was an incredible experience, and I’m really glad we didn’t try to do this alone.”
Crash Champions ultimately triumphed. The final sales price dramatically exceeded the client’s minimum goal, with the winning bid coming in at more than 40% higher than the lowest bid. The deal also included favorable long-term, triple-net leases that Focus Advisors assisted in negotiating. We were even able to accelerate the timeline so the transaction could close before the end of the year (when tax rates were expected to increase) — and did so without a change in price or terms. Adam also chose to continue working with the acquirer to help them build out the New Mexico and surrounding regions, leading to a successful partnership for both parties.
“You trust in a team to help you operate your business; it’s no different when you sell. You need a team like Focus Advisors — with the knowledge to protect you, promote your business, and help you get the most value. Without them, you’re putting yourself at a lot of risk.”