8 | Orgill Case Study In terms of geographic proximity to West Helena and H&M Lumber Company, CNRG’s nearest retail operation is Home Hardware Center, based out of Natchez, Mississippi, which at the time operated 23 locations. In addition to its geographical location, H&M’s customer base, general product mix and store layout made the operation an ideal fit for the Home Hardware brand. After the business broker connected Morris Jr. with the CNRG team, both sides began the vetting process. John Sieggreen, CNRG president and CEO, says his team were impressed with the business Morris Jr. and his family had built and saw a great deal of potential in the prospect of an acquisition. According to Sieggreen, the key to ensuring a successful transaction was making sure the operation was in solid financial condition and also making sure that Morris Jr. would be comfortable turning his family’s legacy operation over to new ownership. “When we first looked at H&M, it was apparent that it was a very good store,” Sieggreen says. “There was not a lot of competition within the trading area, and we recognized that it would likely be a good fit within our Home Hardware brand because, in many ways, it mirrored a lot of Home Hardware’s existing stores in terms of clientele, product mix and so on.” Sieggreen shares that Morris Jr. was very keen on learning about CNRG as an operation as well as gaining a better understanding of the Home Hardware brand before moving forward with the sale of the business. “I wanted to do all the vetting I could before we even discussed an offer,” Morris Jr. says. “I wanted to understand how they would go to market; how they treated their communities; how they treated their employees. I wanted to look at the best and the worst of their operations.” To get the kind of view he wanted, Morris Jr. met with both the CNRG and Home Hardware teams. He toured multiple Home Hardware locations and spoke with Home Hardware employees. He also had his employees visit a number of Home Hardware locations, ask questions and interact with Home Hardware employees. “I talked to everyone I could,” Morris Jr. says. “I looked at Home Hardware stores from the best to the worst, and I saw that even with the locations that needed to improve, there was a plan in place and they were working on making the changes needed. I saw the whole gamut and how they adapted to serve the markets they were in. The employees all seemed happy and the communities seemed happy. At that point, I was satisfied that they would be a good company to move forward with in discussions.” From the CNRG team’s perspective, they welcomed Morris Jr.’s hands-on approach to making sure the deal would be a good fit for all parties. “He undoubtedly did a lot of vetting of us and we welcomed that,” Sieggreen says. “This was his family’s legacy, and he wanted to make sure that we did right by that and did right by the community and the employees. We understood and certainly respected that.” With a green light to move forward with the acquisition in early 2020, CNRG’s team put together an offer package and a formal letter of intent outlining how the acquisition would proceed. According to Sieggreen and John Dorrill, who oversees acquisitions for CNRG, when developing an offer for a business, the CNRG team strives to provide prospective acquisition targets with a bid that is fair and represents a win-win for both buyer and seller. “We lead with a fair number and we don’t want to start out lowballing or haggling like we are at a flea market,” Sieggreen says. “We also don’t lead with a big number just to get the owner’s attention and then whittle away at that number as you go through due diligence. We lead with an honest and fair number, and that establishes an honest and fair relationship.” Dorrill adds that, “In a successful acquisition, we want the seller to be as proud of their business after the sale as they were before
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