Unlocking the highest value: Baker Tilly’s approach to sale readiness and market positioning
Baker Tilly advised Cedar Grove’s shareholders on the sale of their business—positioning every aspect to attract serious buyers and maximize value.
Strategic preparation turned a standard transaction into a competitive bidding process. By combining ownership clarity, disciplined operations, and market positioning, Cedar Grove attracted multiple strategic bidders and exceeded clients' purchase price expectations. Our approach emphasized management continuity, cultural alignment, and tax optimization through QSBC status to maximize after-tax ‘cash in jeans’. This case provides a practical roadmap for preparing mid-market building product retailers and distributors for the competitive sale process.
Readiness isn’t just numbers—it’s operations, HR, IT, culture and much more...
Understanding the market forces
The Canadian building materials distribution sector is experiencing rapid consolidation as private equity groups and strategic buyers seek scale, supply chain control, and regional expansion. In British Columbia, demand for roofing and building envelope materials remains strong, driven by population growth, urban redevelopment, and climate-related retrofitting programs. Recent years have introduced dynamics that shaped the M&A environment: supply chain disruptions during COVID-19 underscored the value of reliable distribution networks, labour shortages and inflationary pressures elevated the importance of operational efficiency, and independent distributors with strong client relationships became prime acquisition targets. These trends created opportunities for businesses to proactively prepare for a transaction and transition of business ownership. Well-positioned companies have been commanding valuations well above historical norms.
Readiness in action: Cedar Grove’s path to premium value
Cedar Grove, Western Canada’s largest independent roofing supplier, operated successfully for more than 45 years. Its reputation, diversified client base of over 500 accounts, locations and experienced management team made it a highly attractive acquisition target. The company’s readiness for a transaction was underpinned by both structural and operational strength. On the structural side, business and property assets were held separately under common ownership, simplifying the transaction and enhancing buyer confidence during due diligence. The properties did not have to be sold as part of the business transaction. Cedar Grove also qualified as a Qualified Small Business Corporation (QSBC), enabling the owners to benefit from the Lifetime Capital Gains Exemption (LCGE)—a key advantage that contributed to a tax-efficient outcome – more ‘cash in jeans’.
Operationally, Cedar Grove built a strong foundation. Its management team included seven senior leaders, each with more than three decades of industry experience, ensuring continuity and institutional knowledge critical to maintaining client and supplier relationships. With a customer base exceeding 500 accounts, the company exhibited low concentration of risk, supported by clear reporting structures and well-established internal processes. As an essential service provider during the COVID-19 pandemic, Cedar Grove demonstrated resilience and reliability, further reinforcing its reputation in Western Canada. Longstanding partnerships with contractors enabled consistent wins on large strata and commercial projects, positioning the company as a trusted leader in its market.
Timing is everything—why early moves win big
Industry consolidation trends created a compelling case for Cedar Grove’s sale. Strategic buyers were seeking cost synergies and margin improvements through procurement and operational efficiencies, as well as geographic expansion into Western Canada’s roofing supply network. Cedar Grove offered these benefits along with opportunities to enter new segments such as new construction, commercial roofing, and building envelope solutions. The presence of several competing buyers—direct competitors—introduced rare strategic tension, triggering a bidding environment that ultimately exceeded purchase price expectations. This dynamic illustrates how proactive readiness and running a full sale process managed by professionals can unlock extraordinary outcomes in competitive markets.
Building trust and continuity when change is on the horizon
Baker Tilly proactively addressed seller concerns about cultural fit, employee continuity, and post-transaction uncertainty. By positioning management retention as a key value driver, Cedar Grove ensured stability for employees and clients while maintaining negotiation leverage. Cultural alignment was prioritized alongside financial terms, enabling the seller to select not just the highest bidder, but the right long-term partner for the business and its people.
Your roadmap to readiness
Our advisory team applied a structured readiness framework to maximize transaction outcomes.
Baker Tilly's 5-step process to sale success
The first phase focused on laying the groundwork for a successful transaction. This included preparing confidentiality agreements (NDAs) for prospective buyers, clarifying the client’s objectives for the sale, and crafting a tailored sales strategy aligned with those goals. We then gathered all required financial, operational, and legal information, prepared a comprehensive databook of the monthly financial information of the business, and assisted in assembling an exit advisory team to ensure readiness from every angle.
Next, we shift to market positioning and outreach. Our team developed a roster of potential purchasers and executed NDAs, followed by the preparation and distribution of a teaser and a confidential information memorandum (CIM). To streamline diligence, we created a secure virtual data room and worked closely with management to present the Company effectively to qualified buyers, ensuring confidentiality throughout the process.
We open the data room, conduct site visits, field due diligence questions, and collect letters of intent (LOIs) from interested buyers. At this stage, we disclose any material issues that would affect the sale upfront, rather than have them surface later in the process and break trust with potential buyers.
Once LOIs were received, we negotiated terms to select the final buyer based on price, cultural fit, and other critical considerations. These terms were then refined in the purchase and sale agreement, ensuring alignment with the seller’s objectives and a structure that supported long-term success.
The final phase involved working with legal counsel to execute all necessary documents and bring the transaction to a successful close. With the deal completed, we celebrated a well-earned milestone with all parties involved.
Breaking down the journey from readiness to results
The process began with an initial analysis of ownership structure, asset allocation, and industry benchmarking to validate readiness. Next, we moved to data gathering and business case development, which included comprehensive financial and operational analysis, client concentration review, and synergy modeling. Finally, we prepared management for buyer meetings and diligence sessions, emphasizing cultural alignment and post-deal integration readiness to ensure a smooth transition.
Takeaways to help you plan today and profit tomorrow
Cedar Grove’s success illustrates that transaction readiness extends beyond financial performance. Ownership clarity, operational strength, and strategic timing can transform a standard sale process into a value-multiplying event. As consolidation accelerates across Canada’s construction materials sector, businesses that invest in readiness today will be best positioned to capture premium valuations tomorrow.
Bringing it all together: the story behind a successful sale
This transaction demonstrates how multiple M&A theses can converge to create exceptional outcomes. Cedar Grove presented clear strategic opportunities, including cost synergies to improve margins, consolidation to expand market share, access to a complementary client base, and geographic expansion across Western Canada. These factors attracted competing strategic buyers, culminating in a bidding war that far exceeded initial purchase price expectations and optimal terms and conditions. The presence of multiple suitors allowed qualitative considerations—such as reputation, cultural fit, and shared values—to influence the final decision, enabling the seller to choose not just the highest bidder, but the right long-term partner for the business and its people.
Connect with Baker Tilly and take the first step toward long-term readiness
Business owners considering strategic transactions or ownership transition options should begin readiness planning early. To discuss tailored approaches that position your business for long-term success and optimal valuation outcomes. Reach out to receive a complimentary go-to-market pricing analysis valued at over $7,500. At the end of the process, you will know the current range of market values specific to your business and will receive a checklist of practical steps to prepare your business for sale, contact Mike McIsaac below.
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