2009: A Tough Year to Sell a Business
No doubt about it, 2009 was a tough year for selling a business. Tight credit thinned the ranks of buyers, and falling sales and profits meant sellers could no longer hope for the heady multiples they might have gotten just a few years ago. Inc. checked back with six of the companies featured on this page in 2009. What we found was a bit sobering. Only one company changed hands, and even that one was only partially sold. Fortunately, though, not all the news was bad. Here's the update.
NO PROBLEM RACEWAY PARK
A partial sale is better than none at all
Owner Pat Joffrion sold one of his two racetracks in Louisiana. After six months on the market, it went for $1.5 million to U.S. Racing Club, a company that plans to build a country club and condos around the track. Joffrion is asking $4.9 million for his other track, a drag strip, and other facilities.
MADE FOR SUCCESS
A deal done in by the credit crunch
The owners of this audio-book company, Bryan Heathman and Chris Widener, struck a deal to sell this Washington State business in May 2009 to a private equity group putting together a roll-up of self-publishing companies. They had been hoping to get $1.1 million. But the investors couldn't secure adequate financing. Heathman ended up buying out Widener, who is preparing for a U.S. Senate run in Washington. Heathman, who now plans to hold on to the business, regrets not hiring a broker to manage the attempted sale, a chore he says took up 75 percent of his time over the course of a year.
BERRY BROTHERS SAWMILL
No deal, no problem. Business is booming.
Railroad ties are this sawmill's primary product. When owner Tim Hanback put his Tennessee mill up for sale for $850,000 last March, the federal government had just announced its stimulus package. Given that railroads are anticipating federal dollars for track improvement, they have been stepping up orders for ties. That spurred Hanback to double the production capability of his mill. Business has since improved dramatically, and Hanback has taken the mill off the market.
THE ISLAND INN
Stranded for the winter
After a solid summer season, the Island Inn, located off the Maine coast, had several interested buyers, including foreign investors attracted by the low value of the dollar. But as there are no firm buyers yet and regular ferry service has been suspended for the winter, it will be a while before the owners, Philip Truelove and Howard Weilbacker, will be able to show off their spectacular property. They are sticking to their $4.3 million asking price.
A ski resort sale that didn't go anywhere
Rick Metcalf says he received a full-price offer for his California ski resort from a large corporate owner with several ski operations. But the buyer ran into trouble securing financing. The company remains interested, however, as do several other parties. Metcalf anticipates good 2010 results and has no intention of lowering his $1.7 million asking price. He's just keeping his fingers crossed for a snowy winter.
COUNTRY LANES NORTH
No reason to hurry
Unlike many businesses struggling through the economic downturn, Robert Carlson's 24-lane bowling facility in Minnesota saw sales rise last year. Maybe bowling really is, as is often said, a recession-proof business. Carlson has received expressions of strong interest from buyers around the country, but none willing to meet his $2.4 million price, which remains firm.
DARREN DAHL is a contributing editor at Inc. Magazine, which he has written for since 2004. He also works as a collaborative writer and editor and has partnered with several high-profile authors. Dahl lives in Asheville, NC.
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