ADK Packworks LLC, a Vergennes, Vermont designer and manufacturer of reusable grocery bags and market baskets was successfully sold to a multi-billion dollar international housewares distributor.
ADK Packworks developed, patented and launched the PackBasket in 2013 - a reusable grocery bag with a revolutionary collapsable internal frame and a wide range of carry and storage options. "The concept for a reusable shopping bag that could stand upright and hold heavy loads was inspired by the Adirondack pack baskets used by the early settlers of New York’s Adirondack region, hence the ‘ADK’ name”, according to Scott Hardy, ADK Packworks co-founder.
The company was well positioned to capitalize on the growing demand for reusable grocery bags. By some estimates up to 30 billion plastic shopping bags are consumed in the United States every year. Many states and cities have responded to this waste by requiring stores to charge a fee per bag or banning disposable bags altogether.
ADK followed their early success with the launch of the MarketBasket two years later combining contemporary handbag fashion with ADK’s patented internal frame.“We recognized a huge market for a sturdier, more functional and more attractive general purpose bag.” says co-founder Doug Rumbough. “Our customers use ADK bags for all sorts of applications we never expected like boating, storage, knitting and more.”
As ADK Packworks grew, they faced the challenge that all successful startups face: how to address the capital and management requirements of growing into an independent national brand. They could continue to “bootstrap” their way forward, building on their small and fiercely loyal customer base, or find a strategic partner who could take the company to the next level. The owners felt good about what they had achieved, and decided it was time to exit the business.
It can be a challenge for small to mid-size companies to find the right advisor to help them sell their business. Investment banks aren’t interested in clients smaller than $5 million per year in revenue, and traditional business brokers tend to focus on main street businesses and franchises. ADK Packworks was a small business with international potential looking for a large, strategic buyer.
Venture 7 Advisors recognized the strategic potential of ADK Packworks for the right buyer. As we prepared ADK for sale, we compiled a list of more than 50 potential strategic acquirers. Then we rolled up our sleeves and actively engaged high-potential buyers directly via email, social media and cold calls. We showed them how ADK Packworks could fit in with their own product line.
One of those potential strategic acquirers, a $1.8 billion per year Illinois-based housewares distributor, signed a letter of intent two months later and ADK Packworks was successfully sold in August. At full asking price.
“We’re excited that the new owners of the company have the resources to take the product line we created to the next level”, says Doug Rumbough. “Venture 7 Advisors was terrific through the whole process. There is no way we would have achieved this outcome without them.”