Ceco Industries sells and distributes precision testing equipment to manufacturers of printed circuit boards. The equipment is manufactured in Japan and Germany , is highly technical and requires significant operator training. Customers typically invest $250,000 per machine. 

The company was founded in 1973 by Bob Carter and is family owned and operated. The firm attributes its success to superior product knowledge, quick response and the personal relationships Mr. Carter has with his equipment suppliers. 

At age 73, Bob decided it was time to retire. He owned a niche business serving a limited market and believed that he, like many business owners is the driving force of the business. Bob was concerned about the company’s value in the market because he thought prospective buyers would see the personal goodwill he created and that it might not transfer on sale. 

How Mark Richardson helped Bob Carter 

Mark developed a plan to work with Bob to identify the specific components of Bob’s personal goodwill. He spent several days with Bob surveying the company and asking tough and pointed questions because he wanted to find out why Ceco’s customers buy from Bob.

Mark learned that Bob’s customers buy from him because his company solves their problems. Bob has excellent sourcing resources and customers come to Ceco to draw on their vast network of suppliers. Bob took Mark through several projects and Mark quickly realized the scope and depth of Ceco’s vendor relationships. It became evident that prospective purchasers of Ceco would benefit from Ceco’s sophisticated sourcing methodologies.

Mark’s survey also concluded that Ceco’s employees were knowledgeable, technically skilled and had close business relationships with the customers. Mark learned that several customers preferred working with family operated companies because they can respond quickly and provide a higher level of personalized service. Mark recommended that employment agreements be established with key employees to alleviate buyers concerns when Bob retires. 

Finally, Mark identified proprietary operating procedures in the company that resulted in significant cost savings to the firm. Mark recommended that these procedures be written down so potential purchasers would continue to receive these profits. 

Prior to going to market, Mark prepared an offering memorandum that highlighted Ceco’s intrinsic value. Mark’s analysis repositioned owner goodwill to company goodwill by identifying and quantifying specific areas of intangible value. Potential buyers could clearly understand the company’s profit drivers. 

The company was purchased by an entrepreneurial corporate executive. 

Mark Richardson negotiated the transaction. 

About Mark Richardson