In the world of deal making, closing a smaller deal can take some creative matchmaking. The time and energy required to get a deal to closing is just as much and sometimes more than in a larger deal. That was the case with Ram Electronics, and according to Randy Rua, “We had to pull in partners from multiple sources to get the deal done. A larger firm may have let this deal die a quiet death, but we knew we had the right buyers for the business and we just needed to put the right pieces in place. We don’t typically see the MEDC (Michigan Economic Development Center) involved in our transactions, but at the end of the day they were key in making the deal possible.” Michigan, and particularly West Michigan is very pro-transaction with excellent support from both professional advisors and government agencies.
This transaction offers a chance for an in-depth story about the current seller’s market for businesses. It also highlights how the right team of advisors using some non-standard sources can make possible even a potentially complicated deal.
Lynne Bosgraaf and Brad Davis had a goal of purchasing a business. They had both come from a successful business in a similar industry as Ram Electronics and knew the next step was owning their own business. They had some specific goals they were trying to meet, and were looking forward to owning a business that they could grow to the next level.
Brad and Lynne previously transformed a small contract manufacturer into a world class specialty lighting designer and manufacturer. They brought with them extensive experience in markets such as automotive and contract office furniture with a variety of disciplines including but not limited to strategic vision, operations, marketing, technical sales, program management and engineering.
Because of some unusual issues in financing the project, a key element in making the deal happen was bringing in a team experienced in finding financing solutions. Financing for the acquisition was provided by Mercantile Bank in conjunction with the Michigan Economic Development Corporation (MEDC). Mercantile was able to quickly offer solutions to keep the transaction moving forward towards closing.
With the help of the MEDC’s collateral support program, the Michigan Strategic Fund provided collateral that was able to be leveraged within the financing structure. The MEDC seeks out opportunities to provide assistance that will enhance economic activity and job growth in the state and Ram Electronics was a great fit for the program. Without the assistance of the MEDC, the structure would not have been possible for Lynne and Brad to close the deal.
Ram Electronics began over 45 years ago and offers both contract manufacturing of electronic assemblies and electronic design services. They consider themselves a “one stop source” and offer circuit board design, harnessing design, printed circuit board (PCB) layout, software integration design, prototype fabrication, environmental stress screening, automated assembly, and complete electronic manufacturing services (EMS). Ram prides itself in its quality, being ISO 9001:2008 certified, and customer service.
Ram Electronics currently has 16 employees and revenues between $3MM-$6MM. The company is located in Fruitport, MI, which is about 30 miles northwest of Grand Rapids and close to Muskegon.
Rua Associates, LLC proudly served as the exclusive mergers and acquisitions representative for the local buyers. The Rua team was able to keep the deal moving forward through challenging moments and Randy Rua was able to bring the transaction to the finish line after multiple months of negotiation.
At the end of the day, a Michigan based company was sold to a local buyer with the help of a Michigan based M&A firm and a Michigan bank backed up by MI state funding. It is a reflection of the current M&A market as a seller’s market. With the right team of advisers and financial organizations, deals continue to be successful, resulting in a positive impact to the buyer, seller, employees, customers and community. That is the definition of a successful transaction at Rua Associates.