Employee Purchase was acquired by Heavy Truck & Auto Repair
Transaction Description
Auto and Heavy Truck repair business located midway between Austin and Houston. This business was started by the current owners in 1985 and has grown to become recognized as the experts in the area for automotive repair, mid-size truck repair, semi-truck repair, oil field truck repairs, RV repairs, transporter buss repairs, and more.
The owners have grown their business since start-up by developing strong relationships with their commercial clientele and local community.
Transaction Details
Heavy Truck & Auto Repair
Employee Purchase
Transaction Overview
Employee buyout using Seller Financing for the business and lease option to buy for the real estate.
Challenges
The business with real estate was pre-qualified for an SBA backed loan. The employee that wanted to purchase it was credit worthy but lacked initial cash down payment for the loan.
Sellers felt this employee was the right buyer and wanted to see it transition to him. Sellers were willing to carry the note on the business, offer an affordable lease, and give him a first right of refusal on the real estate in 2 years.
Solutions
Seller Financing with 2 year balloon.
Obtain SBA backed financing in 2 years to payoff balloon.
Affordable property lease with escalations built in.
First Right of Refusal on property purchase.
Summary
Even thought this business is in a rural community, there were multiple buyers interested. Since the Employee that bought the business had been with them for 8 years and the Sellers started the business when they were about the Employee’s age, the Sellers really wanted to see it transition to him, so they were willing to help the Employee by financing the deal themselves. A great example of “paying it forward” to help him get his start in business ownership.
