Velcon Filters, now part of Parker Hannifin, is an aviation manufacturer whose customers were both commercial and military based in Colorado Springs, CO. We initially sold them to a multi-billion-dollar private equity group and then to a $15 billion strategic buyer. Our client retained 25% of the company in the original transaction (so they could have a second bite of the apple) and was bought out entirely in the second acquisition. Total sales proceeds to our client on these two deals exceeded $100 million. They received this amount because Ascend was able to increase their financial statement EBITDA almost 50% on the original M&A transaction and it withstood due diligence by KPMG, a Big Four accounting firm retained by the buyer.
We worked with Velcon for over 25 years, both as their CPA and M&A firm. One day we had a meeting with the president and told him that the company was worth approximately $70 million, in case he was interested in selling. He said his dad started the company 50 years earlier, now he is running it, and someday he would like his son to be in charge, so thanks but no thanks. We told him we completely understood and that it was our job as his advisors to let him know his company’s worth and his decision to decide what served him best. The next day the president called me in and said “We’ve decided to sell. That’s a lot of money!”