Electronic, Marine and Automotive Aftermarket Distributor
1. Electronic, Marine and Automotive
Aftermarket Distributor
Selling Memorandum
January 2012
2. Electronic, Marine and Automotive Aftermarket Distributor Available for Acquisition
The company is a specialty distributor of products for the electronic, marine and automotive aftermarket
industries. It imports from both foreign and domestic sources, inventories, offers value added services like
kitting and sells products to distributors, installers and consumers through its website nationwide.
The owner of the company has been absent for the last 6 years due to various illnesses and can no longer
own the business.
A Strategic Buyer
A strategic buyer can acquire 1) key clients relationships and 2) consolidate and improve operations. The
crown jewel of the company is a large, repeat client base consisting of well-known distributors and
installers in the industry. Additionally, the strategic buyer can consolidate operations, remove overhead
and improve current gross product margins of 38% by adding full time management oversight and
upgrading inventory systems.
An Overseas Buyer
The overseas buyer can acquire 1) a domestic presence, 2) key domestic client relationships, and 3)
domestic distribution channels in the electronic, marine and automotive aftermarket industries. In addition
to the above, the overseas buyer can improve cash flow by adding full time management oversight and
upgrading inventory systems.
Financial Highlights
Sales are estimated to be $1.9MM in 2011. Cash flow is estimated to be $52M in 2011 or 3% of sales.
Cash flow is calculated by adding back expenses to net income that are not passed on to a new buyer.
The Asking Price
For the asking price of $557,000 the buyer receives 1) inventory, 2) assets, and 3) the ability of those assets
to produce cash flow or goodwill. The inventory is valued at $324,000 or 58% of the asking price. There
are no assets of value in the business. And, the goodwill is valued at $233,000 or 42% of the asking price.
The owner of the company will hold a note.
Communications & Inquires
All communications, inquiries and requests for information should be addressed to Gary Kane. He can be
reached by phone at 855-chimera (244-6372) ext. 801 or by email at gkane@chimerastrategies.com.
About Chimera Strategies
Chimera Strategies LLC is a full service business brokerage firm. We believe with the right purpose,
culture, people and processes success happens naturally for our clients and our firm. Additional
information about our firm can be obtained by visiting our website at ww.chimerastrategies.com.
3. ________________, 20______
Address:
Attn:
[Name] [Title]
Thank you for contacting us about your interest in acquiring the _Auto Electronics Distributor _
(the “Business”). The undersigned, Chimera Strategies, LLC (“Chimera Strategies”), will gladly provide
you with more information about the Business on the terms outlined in this letter. Toward that end, you
agree with the following:
1. Except for information that is a matter of public knowledge and is already in the public domain,
all information that we transmit to you concerning the Business will be treated as “Confidential
Information” by you and all others you disclose the information to as described in Par. 2 below. Following
authorization we receive from the owner of the Business, Chimera Strategies will transmit to you,
Confidential Information, along with other information regarding the Business that you may request from
time to time. We do not warrant the accuracy of the Confidential Information or any other information we
transmit concerning the Business; you are responsible to verify the truth and/or accuracy of all such
information.
2. Confidential Information may be disclosed only to your attorneys, financial advisors, management
personnel or others (“Advisors”) who need access to the Confidential Information in order to evaluate
whether you will acquire the Business (the “Transaction”) and only if you instruct your Advisors not to
further disclose the Confidential Information.
3. Confidential Information will remain the property of the Business and will not be used by you or
your Advisors for any purpose other than evaluating the Transaction. The obligations to safeguard
Confidential Information continue indefinitely, even if you should decide not to acquire the Business. If
requested, you will promptly return to us all Confidential Information.
4. Unauthorized disclosure of Confidential Information may cause irreparable harm to the Business,
which, in addition to any other remedies it may have, will be entitled to seek an injunction to prevent the
unauthorized disclosure of Confidential Information. You will indemnify and hold the Business, Chimera
Strategies, and their respective principals and employees harmless from any damages they may incur
arising from the breach of the terms of this letter by you or your Advisors.
5. You acknowledge that Chimera Strategies is the broker that made the introduction between you
and the Business concerning the Transaction and that Chimera Strategies represents, and is the agent for,
the Business; Chimera Strategies is not your agent or representative. You agree that you and your Advisors
will not contact the principals, employees, and/or Advisors of the Business directly or indirectly, but will
instead, present all questions and communications concerning the Business to Chimera Strategies which
will relay same to the Business and provide you with its responses. Should you, or any entity owned or
controlled directly or indirectly by you, acquire any interest in the equity or assets of the Business in such a
manner that circumvents or attempts to circumvent the involvement of Chimera Strategies in the
Transaction and which conduct interferes with the payment of the full commission owed to Chimera
Strategies by the owner of the Business, you (and/or the entity you are affiliated with that acquires such an
interest in the Business), shall be liable to Chimera Strategies for it commission and all other damages it
sustains as a result of such conduct, including reasonable attorney fees. Lastly, you agree that for three (3)
years following the date you are provided with Confidential Information, you shall not, either directly or
4. indirectly, solicit, advise or counsel any employees of the Business to leave their employment with the
Business.
If these terms are acceptable, please countersign this letter where indicated below and return it to
the undersigned. Once we receive the countersigned letter, we will be able to provide you with the
information you request, as authorized by the owner of the Business. We look forward to working with
you.
Very truly yours,
Chimera Strategies, LLC
By: ____
Gary Kane, Founder & Managing Partner
AGREED:
By:
[Name] [Title]
[RETURN BY FAX AT 516-908-3719 OR EMAIL AT GKANE@CHIMERASTRATEGIES.COM]