- Blog, Cash Flow Financing, Growth Capital, Leveraged Buyout, M&A, Mergers and Acquisitions, Mergers and Acquisitions, Mezzanine Debt, Regional Capital
- December 03, 2015
As a follow-up to our previous blog that discussed the motivations behind lower-middle market mergers and acquisitions, we’ve chosen to highlight our recently supported transaction; Burrell Scientific’s (“Burrell” or “the Company”) purchase of Reagents, LLC (“Reagents”) to demonstrate the benefits of a merger or acquisition.
Burrell has been headquartered in Pittsburgh and operating in the scientific equipment and distribution space for nearly a century. During that time, the Company became well-known for the quality and durability of their equipment. In particular, their line of Wrist-Action® laboratory shakers has developed significant brand equity within their respective markets.
While Burrell’s products clearly demonstrated significant value to their customers, their overall growth potential has been constrained by their narrow product focus, limited outbound sales efforts and small geographic footprint. The acquisition of Reagents serves to bolster the Company’s resources in all three areas.
With the acquisition of Reagents, the Company has added a broad portfolio of chemical solutions to complement their laboratory equipment and supply offerings. This powerful combination allows for products to be cross-marketed to both companies’ customer base, significantly expanding their overall addressable market.
As a combined enterprise, outbound sales efforts can be leveraged for the benefit of both businesses, allowing for more successful marketing of the overall product portfolio. Supporting this level of sales activity would have been difficult for either Company to carry out on its own.
Finally, Burrell’s presence in Western PA combined with Reagents broad customer base within the Southeastern market provides the consolidated enterprise with access to both the Mid-Atlantic and Southeast regions of the U.S. This has the effect of reducing each company’s exposure to certain industries while allowing for a larger addressable market.
In summary, as with many mergers and acquisitions in the lower-middle market, Burrell’s acquisition of Reagents will allow for a stronger, more stable enterprise going forward.