I am the owner of the company, and enjoy the business. How long can I remain in the business?

We normally buy companies that can operate on a stand alone basis. We will never know your business as well as you and your management team and it would be foolish to think that we can run your business better than you and your team. As such, we want your continued leadership for future success.

Our approach is based on management that is capable and interested in staying with the company. Normally, we would like the owner to stay on forever, but we know this is not realistic. We work with owners to develop a program that works for both parties but the bottom line is that you can stay as long as you want.

I am the owner of the company and I just want out of the business completely. Is Rex-Hide still interested?

The short answer: No.

If your goal is a pure exit, we probably are not the right buyer. Of course there are exceptions if your business fits into one of our existing operating companies, but in general, we will need your leadership and vision going forward. Naturally, we understand that nothing is forever and your role can change over time.

If you think you want out of the business entirely, I would still encourage you to call. We can assess your particular situation and see if there is a fit. We have found owners interested in exiting the business but have decided to stay once they join the Rex-Hide team. Although Rex-Hide does not get involved in the day-to-day operations, Rex-Hide does take over some of the administrative burden (particularly accounting function). Many owners find that freeing up some of these burdens and having a new partner in business impacts their level of interest and their desire to stay involved.

Regardless of your current thought process, call us and let’s have a candid discussion. You have nothing to lose.

How does Rex-Hide value companies?

The foundation of our valuation is a risk/reward analysis. Companies with a strong record of profitable operations tend to reduce overall risk. In situations where companies have great upside opportunity, we structure plans that reward that future growth and profitability.

You can have confidence that our approach is straight-forward and conducted with the high-integrity we seek in our owners. We never try to “out-negotiate” our seller. After all, we don’t know your business better than you do and more importantly we are looking for long-term partners and trying to out negotiate you is no way to start a relationship!

What are the biggest factors influencing Rex-Hide’s analysis?

The primary factor is the owner and management. Of course, a demonstrated ability to earn a profit is essential, but we want to find those owners who like the money, but LOVE their businesses.

You mention managing risk. What are the greatest risk factors for a closely held business?

Anyone who buys your business is looking for a return on the investment. Rex-Hide, like any other buyer, seeks to invest capital wisely. Our options are simple:

  • Invest in the stock market
  • Invest in our existing operating companies
  • Invest in companies like yours

Each of these has a certain level of risk. Higher risk demands a higher return (known as a “risk premium”). Closely held companies present several risk premiums that impact the value of the company. For example:

  • Lack of Marketability
  • Customer Concentration
  • Geographical Diversity
  • Product Diversity
  • Resources (including personnel, capital, etc.)

Of course, there are other risks that may become apparent and there are mitigating factors that may reduce each of these risks. However, there is always a balance between risk and reward. Our job is to provide a reasonable return at a manageable level of risk.

What happens if Rex-Hide says NO?

Nothing. It is your business and you continue to have all of your options available. However, keep in mind that Rex-Hide may say Yes, but you may say No. This is not a problem; we understand that our approach is not for everyone.

Either way, we feel fortunate that we have had an opportunity to meet owners, share our beliefs and learn from others. We also understand that circumstances change over time and we may have an opportunity to work together in the future.