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Episode Summary
You’ve had three buyers knock on your door this year and you don’t actually know what your business is worth, what your debt level is doing to the number, or whether the firm you’d hire to sell it understands what you do. Steve Prefontaine and his dad Bob built Scaff Cryogenics into one of four companies in the country doing what they did, and when Chart Industries (plus four other strategic buyers) came calling, they ran the second sale themselves. No investment banker. Their own attorney who had m&a reps, their own accountant. We got into how Bob’s earlier exit shaped the playbook, why the repair business, the leasing book, and the real estate sat in three separate entities from day one, the five years they spent driving debt down before serious conversations started, what the failed 2012 m&a advisor attempt taught them, and why the ability to walk away from the table is the most valuable thing you build before a buyer ever calls. Steve closed a $12.5M all-cash deal, kept his employees employed, and slept through the night for the first time in 24 years. This one ties directly into Milestone 6 — Transaction Value.
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## Top 10 Takeaways- The operating company, the leasing book, and the real estate sit in three separate entities. Not one blended LLC.
- Run every decision like it’s your dollar. That’s the habit that compounds across a 24-year build.
- Start driving debt down five years before you sell. Not the day a buyer calls.
- Your debt on closing day decides whether you got paid for 24 years or just kept the lights on.
- If an m&a advisor can’t explain your business to a buyer better than you can, fire them.
- Use an attorney who has done m&a reps. Even if they’re already your guy.
- Five buyers at the table beats one buyer on every term that matters.
- The ability to walk away is the most valuable asset you build pre-sale. Nothing else comes close.
- The “are my employees safe?” question is non-negotiable. Get it eye-to-eye or walk.
- Even a clean, simple, debt-free business gets cavity-searched in diligence. Plan for the hit on operations.
Sound Bites
“Go to work every day like you own the place. I don’t care what type of situation it is. Make sure you act like it’s your dollar and you’ll never go wrong.” (@00:05:39) — Steve Prefontaine
“We call them intentional growth boot camps. Grow the value of your company with the end in mind, because it takes intentionality. And it took you 10 years.” (@00:33:13) — Ryan Tansom
“If two guys in New Hampshire are willing to move a million and a half, you big monster of a company can move a million and a half. Get your shit together. Let’s meet halfway.” (@00:59:53) — Steve Prefontaine
“The due diligence process, I don’t know how else to explain it, but to be brutally honest, they literally will climb up your butt with a fine-tooth comb and look at everything. I call it a cavity search.” (@01:03:31) — Steve Prefontaine
About This Episode
Steve Prefontaine is the former co-owner of Scaff Cryogenics, a New Hampshire-based cryogenic tank repair and leasing business he ran 50/50 with his father Bob for 24 and a half years. In 2017, they sold the operating company, the leasing book (Cryolease), and the real estate (Prefontaine Properties) to Chart Industries in a $12.5M all-cash deal after fielding offers from five strategic buyers. Steve stayed on with Chart and now runs six facilities as VP of his division. This episode is one of the cleanest case studies in the iBD library on intentional pre-sale preparation, peer-to-peer negotiation, and the walk-away leverage that comes from building a debt-free business with multiple bidders at the table.
Resources Mentioned
- Chart Industries — Publicly traded company that acquired Scaff Cryogenics, Cryolease, and Prefontaine Properties in 2017.
- Air Gas — Referenced as the company that bought Bob Prefontaine’s prior industrial gas and welding supply business in 1990.
- The Great Game of Business by Jack Stack — Ryan recommends to Steve at the end as the foundational book on open-book management.
Connections
Phase + Module:
- Module 2 — Expand Knowledge — Learning the game (valuation, deal structure, debt mechanics) before you have to play it
- Module 9 — Operator Transition — Steve stayed on post-sale; the transition from owner to employee inside the buyer
Milestones:
- Milestone 6 — Transaction Value — Cash at close, hold-back structure, all-cash vs. paper
- Milestone 3 — Net Worth & Valuation Targets — What “this business is worth $X” actually means to the owner
- Milestone 7 — Value Growth Plan — The 10-year arc of building a sellable business on purpose
Concepts referenced:
- Enterprise Value vs. Equity Value — Why debt at close moves the number that hits your bank account
- Net Debt and Working Capital — Drive debt down before the buyer calls
- The Multiple & WACC — Five buyers means five different multiples on the table
- Three Lenses of Value — Market value, transaction value, and what the owner actually walks away with