Case Study
Building Products Distribution Sale:
Navigating a Cross-Border M&A Process
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“When my partners and I decided to explore the sale of Monarch, Whitehorn came highly recommended by multiple trusted friends.
Ray and Greg at Whitehorn were with us at every turn, from our first meeting until closing and beyond. They always took the time to understand our perspectives, challenges and goals. They helped us manage tough decisions, negotiate key terms, and navigate the transaction process. Most importantly, they attracted the right buyer and structured a deal that provided a fantastic outcome for our people, customers and ourselves.”
Chad McDonald, Monarch Group of Companies
Company Background:
Monarch is a premium distributor and supplier of exterior building products including siding, roofing, railings, and venting. The Company has operating locations in Calgary, Red Deer, Edmonton, Lethbridge, and Acheson.
The Hurdles:
Buyer perceived risk factors: Transaction occurred during a period of unprecedented growth in the home improvement and construction sectors, raising buyer risks including a “COVID discount” or post-pandemic performance decline fears.
Supply chain disruption: The pandemic resulted in fluctuating material costs, making it harder to separate between margin expansion vs. operational efficiency.
The cross-border barrier: Prime potential buyers were based in the U.S. with minimal to no operations in Canada. An international transaction brought legal, regulatory and cultural nuances.
The Whitehorn Solution:
Strategic buyer narration: Positioned opportunity as a platform for entry into Western Canada and Canada. Drove valuation by the future strategic value of new markets rather than just on backward-looking financials.
Quality of earnings focus: By breaking out sales by margin expansion and organic growth, we demonstrated that Monarch’s growth was rooted in operational excellence.
Competitive process: Engaged multiple strategic and financial potential buyers, resulting in a competitive process that generated numerous offers for the business and real estate.
The Outcome:
Whitehorn successfully structured a clean exit for both the operations and real estate. By eliminating future contingencies and earnouts, we provided two founders with immediate liquidity and a total exit, while the third founder transitioned into a leadership role within the larger organization.
Most importantly, the deal preserved Monarch’s industry leading reputation and guaranteed continued employment for its entire team.
