Situation
Richmond Electric Supply Company, Inc. (“RESCO”), headquartered in Richmond, Virginia, operates as a full-line, stocking electrical wholesale distributor that serves commercial contractors, the government & military, residential contractors and industrial & OEM markets on both a regional and national scale. Founded in 1983 by Darryl Harman with locations in Richmond and Norfolk, RESCO has a strong industry reputation with a solid customer base and supply chain.

Mike Bourn, an industry leader, was interested in acquiring RESCO, but as CEO of a substantially larger competitor, he was not in the position to receive financial information and negotiate directly with Darryl Harman, who was looking for a liquidity event and succession plan.

Objective
Matrix was engaged to analyze RESCO’s financial information, revenue forecasts and operations in order to develop an offer and negotiate an LOI directly with Darryl Harman.

Solution
Matrix served as the financial advisor to RESCO Acquisition, LLC, the entity created to represent Mike Bourn and the group of private investors who acquired the Company.

The Matrix team built a detailed valuation and pro forma model to evaluate the current business, analyze future cash flows & growth opportunities and source the capital for the transaction, including the equity and debt.

Matrix utilized its relationships to raise the equity and source & negotiate terms for the optimum senior financing. In addition, Matrix facilitated the purchase of RESCO’s existing real estate by a separate group of investors.

The management buy-in, led by Mike Bourn as the new CEO, enabled RESCO to capitalize on a liquidity event and succession plan that preserved the Company’s brand, employees and customer base.