Delta Services, Inc. Sold to Thompson Industrial Services
Industry/Sector: Industrial Services
Deal Type: M&A – Sell Side Advisory
FourBridges Team: Chris Rowe
Client Profile: Based in Memphis, Tennessee, Delta Services offers a wide range of industrial services to oil refineries, steel mills, chemical manufacturers, food processors and other industrial businesses.
Client Objectives: Delta was owned by the founder, his wife and their son, who had led the company as president for several years. The founder and his wife sought liquidity for their ownership but also wanted a partner who would complement the company’s strong customer-focused culture. The son desired partial liquidity and a partner who could help Delta Services better capitalize on its reputation and leading regional market position.
Challenge: Delta had significant customer concentration, with over 50% of its revenue coming from one customer. Additionally, FourBridges was hired in 2008 shortly before the onset of the credit crisis and economic recession. The industrial services market had been undergoing some consolidation, but the slowing economy was having a negative impact on all participants.
The Process: The owners asked FourBridges to discreetly test the market with a handful of candidates while focusing initial efforts on a prospective buyer that seemed to be an excellent cultural fit. FourBridges assisted Delta Services in communicating its strategic value to that buyer and also helped the company develop a credible financial forecast to support that value. FourBridges led a negotiating process with that buyer which continued over several months to overcome complex tax issues, a difficult economic environment, and even prospective legislation that severely threatened Delta Services’ largest customer.
The Result: Delta was sold to Thompson Industrial Services, which provides industrial cleaning services to pulp/paper, steel, chemical, plastics, power generation, and other process industries. The family realized its objectives of value, liquidity and continuity with the right partner for growth.
Past performance is no guarantee of future results, and there can be no guarantee that these results will be duplicated in the future. Any testimonials presented herein may not be representative of the experience of other clients.