Overview
Tennessee-based Resource LabelGroup, LLC (“RLG”) is a fast growing converter of pressure-sensitive prime labels. The Company possesses a compelling business model distinguished by a focus on premium complex labels (including extended text labels) with industry leading lead times (days instead of weeks).
Bigelow Assignment
Obtain a liquidity event for RLG’s retired, out-of-state, majority owner.
Challenges
Mitigate RLG from being painted by a jaded industry brush (i.e. typical label converters / printers have low margins, high capital requirements = perceived low value). Bigelow also had to overcome the potential negative perception associated with the retiring majority owner, while providing current management (significant minority owners) a compelling transaction from an ownership and ongoing operational role point of view.
“After interviewing many of the leading middle market investment banks nationwide – I met one that had the characteristics I had been seeking. Bigelow has the fire power of Wall Street but the feel and compassion of Main Street.” Clayton D. Smith, President Resource LabelGroup, LLC
“Bigelow worked hard to uncover the aspects that supported what we intuitively knew – that RLG performed differently than other label printers. Who knew that such an investor even existed?” Darrell Stallcup, Founder Resource LabelGroup, LLC
Outcome
Bigelow led a proactive process to acquire the right new investor for RLG. Key success components included: articulating RLG’s unique differentiation to prospective investors; build the credible case for continued growth; create a tailored process of going wide to screen many potential investors but share confidential proprietary information with only a narrow, select group.
Multiple offers that exceeded typical industry valuation metrics were obtained. The majority owner received a premium exit valuation while management simultaneously selected their preferred financial partner, Lineage Capital LLC. The transaction structure afforded management partial liquidity of their interest, future up-side through equity and performance incentives, commitment of additional growth capital at the closing, and most significantly, operational control.