Home | Valuation Case Study: Central States Marketing & Manufacturing

The First Step in a Business Transition Plan: Understand and Optimize Your Company’s Value

Summary:

  • Industry: Manufacturing / Custom Plastic Extrusion
  • Location: McPherson, KS
  • Ownership: Chuck Singleton and his sons – Zack and Tyler
  • Challenge: Preparing for business transition and determining an accurate value for succession planning
  • Solution: Calculation of Value
  • Results: Defined company valuation aiding in strategic succession planning and facilitating a smooth transition to the next generation
Central States Marketing and Manufacturing is a leading company in the custom plastic extrusion industry. Known for its diverse range of extrusion, fabrication, packaging, and assembly services, the business has thrived under founder Chuck Singleton. As Chuck nears retirement, the focus shifts to transitioning ownership to his sons, Zack and Tyler, who already play key roles in operations.

The Challenge

“The transition has been a topic of discussion but needed a concrete starting point,” said Chad French, Controller at Central States Marketing and Manufacturing.
While the family understood the intrinsic value of the business, they lacked a formal valuation to guide succession planning.

The Solution: A Strategic Roadmap for the Future

The absence of a valuation complicated succession planning and raised questions about the best approach to transfer ownership.
“The importance of the transition process extended beyond the financial valuation; it’s about ensuring the future of the family business,” said French.
Adams Brown conducted a calculation of value and provided ongoing consultation to identify key value drivers, growth opportunities, and risk mitigation strategies. This gave the Singleton family clarity on transition mechanisms such as direct sale, gifting, or hybrid approaches.

Valuation Process

The valuation process included:

Information Gathering

  • Five years of financial statements
  • Organizational and legal documentation

Financial Review

  • Trend analysis
  • Normalization adjustments
  • Peer comparisons

Valuation Analysis

  • Asset, income, or market approach
  • Application based on financial stability and cash flow

Client Interviews

  • Growth potential
  • Distributable income
  • Risk factors

Review Draft

  • Management consultation
  • Validation of assumptions
  • Presentation of value drivers

Timeframe & Cost

The valuation process typically spans 4–6 weeks, starting upon receipt of documentation and a signed engagement letter.
“Initially, pinpointing the starting point for the transition was a challenge,” French acknowledged. “However, the process turned out to be straightforward and efficient.”

The Impact

The calculation of value report was the first step in the succession plan. It clarified the company’s worth and enabled strategic planning for ownership transfer.
“The valuation didn’t just give us numbers; it showed us a path forward,” said French.
It also revealed key value drivers, empowering the leadership team to make informed decisions to enhance business value.

Looking Ahead

“Now that we know what the company is worth, we are equipped to continue moving forward with our succession plan,” said French.
Next steps include:
  • Finalizing succession details
  • Estate planning
  • Gifting strategies
Central States Marketing and Manufacturing will continue working with Adams Brown’s advisors to ensure a smooth transition and long-term success.