mergers and acquisitions Archives

Published on January 25, 2024

3 mins read

Saalex Corp Strengthens Defense Presence with $75 Million Acquisition

Saalex Corporation is a federal services contractor that provides engineering and information technology services for the Department of Defense, municipalities, and small to medium-sized businesses.

On January 24th, Saalex announced the acquisition of Spalding Consulting, for over $75 million. This strategic move positions Saalex as a major player in the lucrative defense sector, expanding its reach and expertise.

“At Saalex, we are continually exploring avenues for inorganic growth to complement our strong proposal capabilities. The acquisition of Spalding Consulting aligns seamlessly with our expansion objectives,” said Travis Mack, Chairman and CEO of Saalex. “

This acquisition follows Saalex’s 2022 purchase of Netsimco, an information technology services provider, for approximately $30 million. The transaction aimed to enhance Saalex’s IT capabilities in the Department of Defense and aerospace markets. Netsimco, with over 180 employees across four states and a consistent annual growth rate of 20 percent, played a crucial role in Saalex’s long-term growth strategy.

The Spalding Consulting acquisition brings several key benefits to Saalex:

Expanded Defense Footprint: Gaining access to Spalding’s established clientele and expertise strengthens Saalex’s presence in the defense industry, unlocking doors to new contracts and opportunities.

Talented Workforce Integration: With Spalding’s 430 skilled professionals joining Saalex’s ranks, the employee base surpasses 1,200 nationwide. This influx of talent enhances Saalex’s ability to deliver a broader range of services to its clients.

Enhanced Software Development Capabilities: Spalding’s expertise in software development complements Saalex’s strengths, enabling the combined entity to offer more comprehensive solutions to clients.

Projections suggest an annual revenue increase exceeding $175 million, solidifying Saalex’s position as a major player in the aerospace and defense market.

This acquisition signifies a significant step forward for both Saalex and Spalding Consulting. Saalex gains a valuable foothold in the defense sector while Spalding gains access to resources and opportunities that fuel continued growth.

The strategic synergy not only benefits the companies involved but also their clients, who can expect a wider range of innovative and comprehensive solutions to meet complex needs.

Looking ahead, Spalding will operate as a wholly owned subsidiary of Saalex, with the executive leadership remaining in place during the transition.

by Tony O. Lawson

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Published on January 18, 2024

4 mins read

Business Buying: A Potential Path to Early Retirement

As the Baby Boomer generation prepares for retirement, a vast, untapped potential emerges: established, profitable businesses seeking new ownership. This presents a unique opportunity for discerning investors, not just corporate giants, to acquire thriving businesses and chart a course toward financial independence.

No longer the sole domain of private equity firms, business buying is becoming accessible to individual investors with foresight and ambition. Imagine owning a beloved local bakery, a bustling community bookstore, or a well-established gym – businesses with proven track records, loyal customers, and the potential to fuel your dreams.

In this article, we’ll provide a high level overview of the key steps in the business acquisition process.

Step 1: Identify the Perfect Match

The first crucial step in purchasing a business is finding the right fit for you. Consider factors such as location, industry, and size. Assess whether you prefer a hands-on approach or a business with an existing manager. Initiate your search online, leveraging various platforms to compile a list and carefully evaluating each potential deal. If you possess expertise in a specific industry or skill, starting there can minimize knowledge gaps and expedite your success.

Step 2: Extend an Offer

Once you’ve identified the ideal business, it’s time to make an offer. Formalize offers using a Letter of Intent (LOI), outlining the price structure and terms. Accurately determining the actual value is crucial, as sellers may overvalue their businesses. Consider hiring an advisor for precision, with many CPA firms offering a service known as “quality of earnings.”

Step 3: Conduct Due Diligence

The third step, due diligence, involves a thorough examination of the business’s financials, operations, and other critical aspects. While this step may seem formidable, avoid going through it alone. Engage a diligence firm or a CPA to streamline the process and ensure a clear understanding of the business’s true profit.

Step 4: Secure Funds and Finalize the Deal

Securing the necessary funds is pivotal. Explore options such as small business administration (SBA) loans, allowing you to invest as little as $50,000 in a million-dollar business. Negotiating the purchase agreement is critical, and collaboration with the seller and their attorneys will facilitate the finalization of the ownership transfer.

Step 5: Grow the business

Congratulations, you are now the proud owner of a revenue-generating enterprise! The final step is to concentrate on growing the business. Boost revenue through marketing and sales efforts, and trim costs by optimizing vendor fees and eliminating unnecessary expenses. Enhance the business’s effectiveness and efficiency to pave the way for financial success and early retirement.

For those who prefer a more hands-off approach, consider negotiating with the current owner to stay involved or hire a capable manager. This ensures a smooth transition and allows you to leverage their expertise, providing you the flexibility to steer the business toward financial success and early retirement without being directly involved in day-to-day operations.