lutz logo
lutz logo
  • Services
  • News & Insights
  • About
  • Client Portal
Search
  • Services
  • Accounting
  • Advisory
  • Financial
  • M&A
  • Talent
  • Tech
  • Accounting Services
Services
  • Audit & Assurance
  • Client Advisory Services
  • Outsourced Accounting
  • Tax
  • Business Valuation
  • Litigation Support & Forensic
View All
Industries
  • Agribusiness
  • Construction
  • Family Office
  • Healthcare
  • Manufacturing & Distribution
  • Nonprofit
View All
News & Insights
Financial Access Checklist
Guide
Financial Access Checklist

Share this information with your spouse to assure you each have access to manage important financial tasks independently.

Read More
  • Advisory Services
Services
  • Accounting
  • Financial
  • M&A
  • Talent
  • Tech
View All
Resources
The Art of Budgeting
Recording
The Art of Budgeting + Smart Saving Strategies
Learn how to get your finances under control and increase your savings! Hear real-life examples and best practices to secure a successful future.
Watch Now
Business Insights
Comparing Business Valuation Methods
Blog
Comparing Business Valuation Methods: Which is Right for You?
Valuation experts rely on three primary approaches to determine the value of a business: income approach, asset approach, and market approach.
Read More
  • Financial Services
Services
  • Financial Planning
  • Investment Advisory
  • Retirement Plan Services
  • Pooled Employer 401(k) Plan
View All
Resources
  • Lutz Financial Blog
  • Our Team
  • Client Portal
  • Charles Schwab Login
  • Send Files Securely
Contact Us
NEWS & INSIGHTS
Website Featured Content Images
Market Commentary
Financial Market Updates

Want to receive financial market updates straight to your inbox? Sign up below!

Subscribe
  • M&A Services
Services
  • Sell-Side Representation
  • Transaction Advisory
  • Exit Planning
  • Business Valuation
View All
Resources
Selling a C Corporation
Blog
Factors to Consider When Selling a C Corporation

Understand the tax issues affecting both buyers and sellers involved in C corporation merger and acquisition transactions

Read More
Business Insights
Post-Acquisition Checklist
Guide
Post-Acquisition Checklist for a Seamless Transition
To help you navigate this critical period, we've compiled a comprehensive checklist covering key areas that demand attention after the deal closes. 
Read More
  • Talent Services
Services
  • Search & Staffing
  • Outsourced HR
  • HR Consulting
View All
Candidate Resources
  • Job Seeker Process
  • Current Opportunities
  • Lutz Internships
Contact Us
News & Insights
Overcoming Bias in Recruitment
Blog
Unconscious Bias in Recruitment: How to Overcome It
Learn how to take the bias out of recruitment and build a diverse, talented workforce with these tips.
Read More
  • Tech Services
Services
  • Outsourced IT
  • Data Analytics
  • Technology Strategy
  • Software Consulting
View All
Resources
When to outsource your IT
Blog
How to Know When It's Time to Partner with an IT Pro

One day your technology seems manageable, and the next you're wondering if you need more support. Here are the clear signs it's time to outsource your IT.

Read More
Business Insights
Untitled design (1)-Mar-08-2024-08-50-35-9527-PM
Video
Pella Client Testimonial
"I've used them for valuation work, stock transfers, hosting all of my technology, and now data analytics. I'd say they lead the pack in terms of anticipating what I'm going to need before I even know I need it."
View Now
Business Insights
BLOG
Explore Topics

Get the latest news and insights on relevant topics that matter most to you.

View All
Webinars & Events
Events
Register Today

Register for an upcoming event or access our library of on-demand recordings.

View All
Financial Market
COMMENTARY
Stay Informed

Catch up on market moves with our weekly update, featuring in-depth insights and analysis.

View All
Resources
EBOOKS & GUIDES
Download Now

Take a deep dive into challenging business topics with these free educational resources. 

View All
  • News & Insights
  • Business Insights
  • Webinars & Events
  • Financial Market
  • Resources
Business Insights
BLOG
Explore Topics

Get the latest news and insights on relevant topics that matter most to you.

View All
  • About
About

Lutz is a business solutions firm for people seeking a partner to help energize and heighten economic and organizational success.

Our Company
Our Team
Offices
Careers
Internships
Contact Us
  • Contact
Client Portal

Log in to your relevant client portal to access your account, upload documents, or make a payment.

Make a Payment
Accounting Client Portal
Financial Client Portal
Charles Schwab Login
Send Files Securely
Contact Us
  • M&A

The Lutz M&A Client Experience + Exit Planning Success Story

Bill Kenedy, Lutz Consulting and M&A Shareholder
September 24, 2019
The Lutz M&A Client Experience + Exit Planning Success Story

An exit planning success story

The following is a story of Bob Henrichs and his experience working with Lutz M&A over a seven-year time frame. Bob recently sold his business with the help of Lutz M&A and his story is a good example of how proper planning can produce great results.

Bob Henrichs acquired The Walling Company back in 1985 where he had been employed since 1981. The company, headquartered in Omaha, Nebraska, is a distributor of engineered mechanical equipment to customers throughout the Midwest. They offer this highly engineered equipment to fit the unique mechanical requirements for all types of industries and utilities in today’s fast-paced, high technology world. The Walling Company (TWC) prides itself in being informed and aware of the most beneficial applications to keep its customers on the very forefront of progress. The emphasis on absolute integrity in serving engineers and companies with the ultimate in mechanical equipment has been responsible for continuous and substantial growth since 1946.

During 2012, Bob was approached by a large competitor that was aggressively buying up companies to fulfill their growth plan. During his tenure as owner, Bob had grown the business significantly, and at the time of the opportunity with this buyer, the company was profitable with revenues of $6.8M. At this time, Bob was approaching the age of 60 and was intrigued by the possibility of cashing out of the business. On the recommendation of his banker, Jason Hansen at American National Bank, Bob contacted Bill Kenedy at Lutz M&A to get advice on valuing his company, and assistance in negotiating a potential sale. Here the story begins.

 

Initial Meeting

In the fall of 2012, Bob met with Bill Kenedy and Ryan McGregor of Lutz M&A to discuss the potential sale of TWC to a large competing business. This initial (no cost!) meeting was filled with questions to Bob regarding the business. Topics included entity type, cash flow of the business, history of growth in the business, employee base/management team, etc. In turn, Bob had many questions for Lutz regarding how the sale process works, taxes, post-sale requirements, etc. As a result of the meeting, Bob hired Lutz M&A to prepare a valuation analysis specific to the purpose of potentially selling the business – at a cost to Bob of about $1,500 to $2,000.

 

Results of Initial Analysis

The initial valuation project uncovered several key issues that Bob did not know prior to hiring Lutz M&A:

  • Due to the company being a C-Corporation, and the buyer expressing an interest in buying the assets of TWC, the tax consequences of a sale of TWC assets were punitive. This issue alone made Bob unwilling to pursue the sale.
  • Even without the negative tax consequences, Bob did not believe selling TWC at a fair price was right for him at that time. Bob still enjoyed working in the business, and the profit he made each year was significantly more than what he would earn by investing the net proceeds from a sale.
  • Bob had grown a successful business and had several long-term, key employees, but ultimately if Bob were not there, the company would struggle to survive. This meant that if Bob had pursued a sale, he would have likely had to stay employed for the buyer for a few years until a replacement was identified and trained.
  • Bob and TWC did not have a CPA. Bob’s brother, a former CPA working for a private business, was preparing Bob’s tax returns annually. Due to the complexities involved with the transition planning Bob saw ahead of him, he decided to hire Lutz to help him with tax advice and preparation of tax returns.

At the end of the initial valuation analysis, Bob determined that he did not want to pursue a sale at that time. He decided to continue operating TWC as he had previously but adding Lutz as the CPA firm for TWC.

 

Next Steps

TWC continued its steady growth, and several more meetings between Bob and Lutz occurred during 2013 and 2014. The first simple move was to make an election to have TWC taxed as an S Corporation. This election did not cause any tax liability for the business and was a simple way to limit the taxes on its sale in the future (at least five years after election).

Next, Lutz assisted Bob with identifying the key value drivers of his business to help him think about ways to increase its value. One piece of advice was to consider hiring a higher-level employee to take over some of Bob’s responsibilities. Initially, Bob did not like this idea, as it did not make sense to him to hire someone to do things that he could do relatively easily.

 

Instead of Selling the Business, Let’s Buy a Business!

In early 2015, Bob received a call from the owner of The Donald Corporation (TDC), a friendly competitor located in Ankeny, Iowa. The owner, who was in his 70’s, had decided he wanted to sell his business and that Bob and The Walling Company would be a good fit. Bob met with the owner and came back with financial information to share with Lutz.

Over the next several months Lutz worked with Bob on negotiating the acquisition of TDC. They tackled how to structure the business in the most tax-effective manner and how to integrate accounting between companies. The transaction closed successfully in the middle of 2015, and TWC was now operating with significantly more revenue, profit, employees and territory. The acquisition opened the door for TWC to customers in several new states and was immediately paying dividends.

 

Get the Monkey Off Your Back

The success of the TDC acquisition was apparent early on, and so was the additional burden on Bob’s daily routine. By early 2016, TWC was humming along, and Bob was now at 60 years of age. Although Bob was still enjoying the business, he was looking to spend some more time enjoying his success.

Lutz had repeatedly been telling Bob that he should look to hire a high-level person to take over most of the day to day operational functions. The only way Bob would be able to sell TWC eventually and retire was to have people in place to run the business without needing Bob around. Bob was skeptical but agreed to try to find someone to fit this role.

Bob tried on his own and also hired an executive search firm recommended by Lutz Talent to assist. After meeting with several candidates, the executive search firm introduced Bob to Rob Barie. Bob had a good feeling about Rob and after several meetings agreed to hire Rob for the role.

This was a difficult decision for Bob; he had to pay a significant salary to get someone of Rob’s caliber into his business. In fact, it cost Bob about 10% of his prior year profit to hire Rob. However, knowing that it was a critical move for him to be able to exit from the business someday, he gave it a try.

Rob learned the business quickly and meshed well with the other employees of TWC. He brought new ideas, advanced the company’s technical capabilities, and quickly proved to be a valuable asset to the company.

Shortly after being hired, Rob mentioned to Bob that he had an interest in buying the company when Bob was ready. He stated he had some financial backing and was willing to work with Bob on this in the future. This idea sounded good to Bob. Rob would know the business and employees, and there would be less of a disruption in the business if Rob purchased it, as opposed to an outside third party.

 

The Time is Right

At the beginning of 2019, Bob decided he was ready to sell the business to Rob. Bob was comfortable with Rob taking over and was ready to start his new phase in a post-sale role. Bob and Lutz developed a reasonable valuation for the business and provided the information to Rob.

At that point, Rob hired his own team to assess the value of the Company and prepare an offer to purchase the business. After minimal negotiations and coordination with the company’s bank (still Jason Hansen at American National Bank!), a deal was struck. The transaction closed July 31, 2019, and all parties were happy with the sale and the overall process.

From the time that Bob first met with Lutz, the top-line revenue and total value of the business almost doubled. Additionally, due to the proper tax planning, the tax bill as a percentage of the sale price was practically cut in half!

The combination of Bob’s expertise, the acquisition of TDC, the hiring of key employees and strategic (including tax) planning from 2012 to 2019 produced a fantastic experience for Bob Henrichs of the Walling Company. His story is a perfect example of how putting effort into transition (exit) planning can pay off. Bob will tell you that it was not that hard to do. It took some time and some money, but the return on investment was incredible, financially and for the peace of mind knowing the company he built was in good hands.

  • Activator, Achiever, Individualization, Analytical, Focus

Bill Kenedy

Lutz Consulting and M&A Shareholder

Bill Kenedy, Consulting & M&A Shareholder, began his career in 1990. He established Lutz's M&A practice in 2015 and has led its growth since then while serving on both the firm's board of directors and the Lutz Financial board.  

Specializing in mergers and acquisitions, Bill guides business owners through critical transition decisions. He provides comprehensive exit planning and transaction services, with specialized expertise in the construction industry. Bill values helping owners achieve optimal outcomes by developing strategic solutions tailored to their unique situations. 

 

At Lutz, Bill says it straight, offering candid guidance that helps owners make informed decisions about their businesses' futures. His direct approach to setting realistic expectations, combined with his focused drive to get deals done, has made him the go-to advisor for business transitions. As a Certified Exit Planning Advisor (CEPA), Certified Public Accountant (CPA), and Accredited Business Valuator (ABV), Bill brings technical expertise to every transaction. Under his leadership, the M&A practice has grown from a concept to a cornerstone of Lutz's service offerings. 

 

Bill lives in Elkhorn, NE, with his wife, Angela. Outside the office, he spends time fishing, hunting, and following various sports teams. 

402.492.2132

bkenedy@lutz.us

Connect on LinkedIn

Recent News & Insights

Guide
Finding a Lifelong Career
You’ll spend over 90,000 hours of your life at work. That’s more time than you’ll spend with ...
Read More
Rural Hospital
CMS Announces New Method II Billing Edits for Critical Access Hospitals
Starting July 1, 2025, Critical Access Hospitals (CAHs) that bill under Method II will face a ...
Read More
Market Commentary
The Dollar and International Diversification + 4.30.25
With recent tariff and trade news, the tone and trading of the dollar has decidedly changed. ...
Read More
Recent News
Lutz Announces Ryan Cook as New Managing Shareholder
Lutz, a Nebraska-based business solutions firm, proudly announces Ryan Cook's appointment as ...
Read More
module-bg-desktop module-bg-mobile

Let’s get you where you want to go.

We work to simplify complexities, help make critical business decisions, and confidently focus on the things that are truly important to you. We embrace your business as our own to spark the right solutions and help you thrive.
Contact Us
Lutz-Logo-white
  • Services
    • Accounting
    • Consulting
    • Financial
    • M&A
    • Talent
    • Tech
  • About
    • Our Company
    • Our Team
    • Offices
    • Careers
    • Internships
    • Current Opportunities
  • Client Portal
    • Make a Payment
    • Accounting Client Portal
    • Financial Client Portal
    • Send Files Securely
    Submit RFP
TOLL-FREE: 866.577.0780 | © Lutz & company, PC 2025 | Privacy Policy
Follow us on Facebook Follow us on LinkedIn Twitter - X Logo Follow us on Instagram Follow us on Facebook