What We Do
Keiter Stephens Advisors provides targeted finance and strategic services specialized for foodservice distributors:
- Mergers and Acquisitions: guiding the sales and acquisitions of foodservice distributorships and regional sales territories
- Custom Strategic Services, including transition planning for family-owned distributors and driving management consensus with KSA’s 3-1-1 Planning Process
- Custom Finance Solutions, including finance strategy development, distribution center expansion analysis, lease or buy decisions on real estate and equipment, and cost segregation studies
- Profitability Improvement on both the vendor and customer sides
Mergers and Acquisitions
Our firm specializes in guiding owners in the sale of their businesses or the acquisition of other distribution companies. We understand the challenging circumstances surrounding business valuations, negotiating strategies, strategic synergies, customer retention and pricing issues for both the “buy” and the “sell” side of a transaction. Keiter Stephens Advisors has a proven track record for maximizing value for our foodservice clients.
“Many M&A brokers approach us to consider companies they have been engaged to sell. Our experience with Keiter Stephens Advisors has demonstrated their knowledge of the foodservice M&A process and their high ethical standards. We’re expanding rapidly, and they only bring us deals they know we’re likely to be interested in – companies with top quality employees and leadership, and with facilities that will help us expand in current markets or into new territories according to our long range plans.
KSA has handled our due diligence investigations and negotiations judiciously on behalf of their sell-side clients. They have an obvious respect for our industry. The most telling result about any M&A process is whether you end up with the company you set out to buy. With a group of acquisitions facilitated by KSA on the sell side that are now part of the Reyes Holdings and Reinhart team, we’re proud to say we closed on the deals we set out to buy.
We’ve been very pleased with our work with Keiter Stephens Advisors.”
CEO, Reinhart FoodService
“The costs of an independent foodservice distributor are growing faster than our gross margin dollars, but more importantly, our customer base was struggling in a tough market. Rarely did a week go by where I didn’t hear from someone who had a client looking to buy someone “just like me”. They didn’t even know me. The calls went to voicemail, the letters hit the trash, and the e-mails were deleted.
This past year, KSA approached me with a warm, genuine offer to see if it made sense to consider selling the business. They worked hard to understand me and what made my business unique. They understood the pride that every owner feels.
Now that the sale has been completed, I can say KSA was aggressive on value but compassionate and supportive to my emotional needs, and they commanded a higher multiple than what those other finance firms were proposing. I sold my business before I thought I would, but I’ve never felt better.”
CEO, Natco Corp.
Custom Strategic Services
Transition Planning for Family-owned Distributors
Achieving successful leadership transitions for family-owned businesses can often be a complex and emotionally charged process.
Knowing when to hand over the reins to others can be more of an art than a science. It can occur over a planned time frame with predefined milestones, or it can happen with little forewarning. In either scenario, KSA’s executives have the experience and diplomacy to plan and facilitate the critical business, finance, and communication aspects of these types of transitions, including:
- Strategies and action plans to help maximize customer retention
- Facilitating internal and external communication meetings
- Planning public relations/press release to local media and to the industry press
- Navigating through the complex financial and tax scenarios to optimize shareholder wealth
- Structuring finance plans to optimize company cash flow
- Working with counsel to incorporate changes in all necessary legal and filing documentation
Drive Management Consensus with KSA’s 3-1-1 Planning Process
The 3-1-1 Planning Process guides foodservice distributor management through a comprehensive planning process that helps distributors establish a course for a three year timeframe. KSA drives decisions on key issues including organizational structure, staff/succession planning, geographic and market segment selections, vendor and product strategies, and warehouse and transportation planning. The process incorporates a detailed one year sales, gross margin and operating budget, and analyzes longer range capital expenditure needs. The end result: a long range plan with measurable results that all key managers participated in developing.
Custom Finance Solutions
Keiter Stephens Advisors’ tailored finance engagements include:
Finance Strategy Development
In a two-pronged approach, KSA evaluates the company’s overall financial position, including current cash flow, working capital requirements, the types and terms of all debt currently in place and future requirements for steady growth or rapid expansion.
For the next stage, KSA helps to develop an overall financing strategy, the forecasts and operating budgets to achieve it, and recommend a debt/financing plan. With years of experience communicating with lenders and investors, KSA can also help evaluate potential borrowing arrangements.
Distribution Center Expansion Analysis
In a tight margin business like foodservice distribution, the decision to add warehouse capacity to an existing facility or to build from the ground up requires detailed operational and financial analysis. KSA analyzes financial ramifications of distance and transportation costs versus build/expand costs, and develops a decision timeline and a financial model that provides real time “what if” options for key points.
Lease or Buy Decisions on Real Estate and Equipment
Deciding to lease or buy items such as tractors, trailers and warehouse equipment can have ramifications for a distributor’s cash flow or balance sheet that extend beyond the immediate transaction. KSA analyzes how different lease or buy scenarios could impact overall business objectives so that distributors can make informed decisions.
Cost Segregation Studies
Whether a foodservice distributor is expanding, constructing or purchasing a facility, KSA can recommend how to maximize cash flow by accelerating tax deductions. This process can also apply to property currently owned.
A cost segregation study analyzes construction and/or acquisition costs and allocates them to specific asset categories, maximizing depreciation for qualifying costs. KSA allocates these costs to personal property asset classes with lives shorter than real property asset classes.
Please contact Keiter Stephens Advisors for more details.
Through extensive “drill down” reporting systems, KSA carefully analyzes customer, product and vendor profitability. This process results in a series of detailed recommendations for improving results. The models KSA uses were developed by Managing Director Bill Beattie, and received the IFDA Diamond Award for Excellence.
After completing the analysis process, KSA follows up with an on-site visit to facilitate meetings with owners, executives, sales teams and procurement groups to review findings and map out measurable goals. Working with management, KSA develops timetables for implementation and follow up. These plans produce near term results, and where needed, provide a roadmap for long term directional change.
“We engaged Keiter Stephens Advisors to work with us on vendor profitability, and with their guidance, we’ve driven down losses on business with unprofitable suppliers from 50% to 25%. More importantly, KSA worked side by side with Jordano’s Director of Purchasing and Marketing to develop the model and incorporate her expertise and vision in the project.
On the customer side, in foodservice, you have to know to the penny what it costs to deliver groceries. KSA helped us uncover potential areas of excess cost or lost opportunity serving operators. Armed with this information, we’ve improved how we manage our sales force by highlighting options for margin improvement and reducing over-servicing, and we’ve improved customer profitability by 20% overall.”
Vice President/General Manager, Jordano’s