How Matthews™ Partnered with an Investment Banker to Maximize Value and Achieve a Successful Business and Real Estate Exit for a Founder-Owner

Client Profile

A founder-owned manufacturing company in the Atlanta metropolitan area had spent more than a year preparing for the sale of its operating business alongside its investment banker. The company operated from a highly specialized facility that had served as its corporate headquarters and primary manufacturing location for decades.

 

Like many founder-owned businesses, the owner faced two competing objectives:

• Maximize proceeds from the sale of the operating company.
• Maximize the real estate value without burdening the business with an unsustainable lease structure.

 

Achieving both required careful coordination between the M&A process and the future real estate disposition.

 

The Challenge

The lease, negotiated as part of the business sale, would ultimately determine the value of the real estate. Every lease term, from rent and escalations to renewal options and term length, would directly influence investor demand and pricing.

 

An overly aggressive lease could negatively impact the operating company’s valuation by increasing occupancy costs.

 

Conversely, a lease designed solely around the business could materially reduce the value of the real estate for the foreseeable future.

 

The objective was to identify the optimal balance between enterprise value and real estate value, maximizing total transaction proceeds. While businesses in this sector typically trade at 4.0x–6.0x EBITDA, sale leaseback investors often value real estate at approximately 11.75x–14.30x annual rent, creating an opportunity to unlock incremental value through the proper allocation of purchase price between the operating business and the underlying real estate.

 

The Matthews™ Advisory Role

Working alongside the company’s investment banker well before and throughout the business sale process, Matthews™ Corporate Advisory, consisting of Aria Pournazarian, Brody Hess, Thiago Delia, and Adam Rose, served as the dedicated real estate advisor. They helped align the objectives of both the M&A transaction and the eventual real estate disposition.

 

The agents’ initial recommendation was to delay marketing the real estate until after the business sale, recognizing that the existing tenant was the founder rather than an institutional credit tenant. By allowing the incoming business buyer to execute a new lease at closing, Matthews™ anticipated significantly stronger investor demand and improved pricing, positioning the real estate to achieve greater value than if it had been marketed beforehand.

 

Throughout the process, the Matthews™ agents analyzed market rent, institutional investor expectations, tenant credit, lease term, escalation structure, renewal options, and overall marketability to develop lease economics that balanced the needs of both the operating business and future real estate investors. Their strategic guidance throughout lease negotiations enabled the investment banker to remain focused on executing the business sale while ensuring the real estate was positioned for a successful disposition.

 

Although Matthews™ recommended a best-in-class lease structure that aligned with institutional investor preferences, negotiations ultimately resulted in a five-year lease term. Rather than allowing the shorter lease to diminish buyer interest, Matthews™ immediately repositioned the opportunity by emphasizing the facility’s mission-critical role, specialized improvements, and long-term operational importance, ensuring it remained highly attractive to qualified investors despite the shorter initial term.

 

The Execution Strategy

Immediately following the successful closing of the operating company, Matthews™ launched a targeted marketing process for the real estate. The client’s objective was to monetize the property quickly while avoiding the perception of a distressed or forced sale.

 

Leveraging the Matthews™ national investor platform and longstanding relationships, the opportunity was introduced directly to a curated pool of qualified investors rather than broadly exposing the asset to the open market. The campaign generated significant interest from more than 150 qualified local, regional, and national investors, including both institutional and private buyers. This created meaningful competition, despite the abbreviated five-year lease term.

 

The Result

The coordinated execution of the business sale and real estate disposition allowed both transactions to proceed efficiently while maximizing value and providing certainty of execution for the client. The targeted marketing process generated multiple competitive offers within two weeks, enabling the client to select the buyer best positioned to close on schedule.

 

The engagement ultimately resulted in:

• Full asking price achieved.
• 100+ qualified investors engaged, generating multiple competitive offers from local, regional, and national buyers.
• Buyer identified within the targeted marketing timeline.
• Non-refundable earnest money deposited upon contract execution, with 15% of the purchase price becoming non-refundable following the due diligence period.
• A successful on-schedule closing.