Case Study • Acquisition
Helping a Founder Step Back and a Trusted Employee Step Up.
Initial $8 million acquisition term loan, giving a hard-working employee an opportunity to buy the business he helped build from a founder looking to ease into retirement on terms their bank could underwrite.
By Grant Daunheimer, Partner — Diamond Willow Advisory
Published • June 16, 2026
$8M
Acquisition term loan
12yrs
Buyer's tenure with the company
3yrs
Staged founder exit
After more than fifteen years of growing his company from nothing, the founder of an Alberta-based underground utility contractor was ready to step back from the day-to-day and ease into retirement.
He had built the business on a few basic principles: show up on time, put in the work, do what you say you will, and accept that you cannot do it alone. Over the years he grew the company alongside a team he came to know and trust, the people who helped him do exactly that.
Retirement & Succession
The founder wanted the business carried on by the same people who had helped build it. To him it was more than an asset to sell to the highest bidder.
It was a legacy worth preserving, and a life-changing opportunity for someone willing to take on the risk and lead its next chapter.
He saw that potential in a long-serving employee who had spent more than a decade with the company. Over twelve years the man had worked his way up from project manager to general manager, and now had a shot at the top job. He knew the crews, the customers, the jobs, and the stress of keeping a project-based business moving. He had earned the founder's trust the slow way, by showing up for years and taking on more each time it was offered.
About Diamond Willow
We help companies understand their borrowing potential, structure appropriate capital stacks, and find lender financing when self run processes fail.
Coming to Terms
When the time came, the two sat down, agreed on a price, worked out terms they could both stand behind, and shook on it.
The terms were simple. The founder would cash out over a number of years, step back from the day-to-day, and help finance the buyer, whose only stake was the equity in his home and the future earnings of the business. All they needed now was the bank.
Most management buyouts are built the same way. Since the buyer rarely has the full price in cash, the purchase is funded by a mix of bank debt and seller financing as the seller is repaid over time out of the company's cash flow, which keeps the seller invested in a smooth handover.
Both knew the company had the fundamentals a bank likes to see: stable cash flow, very little debt, a yard of equipment owned outright, a regional bank relationship going back years, and a reputable accounting firm keeping the books.
Both knew the company had the fundamentals a bank likes to see: stable cash flow, very little debt, a yard of equipment owned outright, a regional bank relationship going back years, and a reputable accounting firm keeping the books.
Declined by the Bank
When the founder and buyer brought the deal to the company's long-standing regional bank, the issue was not the business. The bank knew the company, understood the relationship, and had years of history with the account.
The problem was the structure.
The buyer was a proven operator without the outside capital to buy the company outright. That meant the purchase had to lean on the business itself, just as the request for debt was rising and the founder was preparing to step back. In the way the deal was first presented, that was more transition risk than the bank could take on.
The financing was declined, and the two were left with a good business, a willing seller, a capable successor, and no clear path to close. The founder talked it over with his accountant, who knew the company well and figured the financing was doable if the deal were put together differently. He introduced the founder and buyer to Grant Daunheimer at Diamond Willow.
Over a handful of meetings, Grant went through the statements, the asset base, the contracts, and the rest of the deal documents. He saw what the accountant had seen: a sound business and a deal a bank could get behind, once the mechanics were rebuilt around what it needed to see.
The financing was declined, and the two were left with a good business, a willing seller, a capable successor, and no clear path to close. The founder talked it over with his accountant, who knew the company well and figured the financing was doable if the deal were put together differently. He introduced the founder and buyer to Grant Daunheimer at Diamond Willow.
Over a handful of meetings, Grant went through the statements, the asset base, the contracts, and the rest of the deal documents. He saw what the accountant had seen: a sound business and a deal a bank could get behind, once the mechanics were rebuilt around what it needed to see.
Around 80% of the buyouts that reach us come after a bank has already said no — with the owner assuming the only option left is a private or alternative lender at a much higher cost. Most of the time the business is perfectly bankable. The risk just has to be arranged in a way the bank can underwrite.
— Grant Daunheimer, Partner, Diamond Willow Advisory
How DW Structured the Deal
Diamond Willow rebuilt the financing around the deal the two had already agreed to, shaping it into something a bank could underwrite while making sure the debt would not bury the company if times got tight or the handover did not go to plan.
The revised structure had four parts: an initial conservative $8 million acquisition term loan, a second purchase structured to include additional bank debt and a vendor-take-back note, a phased transition plan, and options to accelerate the buyout if things worked perfectly. With a structure the numbers could support, Diamond Willow took it to market, running a competitive process to find the lender willing to meet the agreed terms at the best rate.
01.
$8M acquisition term loan
Conservatively sized against demonstrated cash flow — protecting the business on the downside if times got tight or the handover did not go to plan.
02.
Phased ownership transfer
Kept the company from carrying the full purchase at once, smoothing transition risk across a defined timeline.
03.
Conservative borrowing
Headroom built into the structure so the business could absorb downside without breaching covenants.
04.
Vendor take-back
The founder finances part of the purchase himself — keeping him invested in seeing the transition through and signalling confidence to the lender.
Results
The initial financing closed at $8 million with the same regional bank that first declined the deal.
Over the next three years the founder will step back in stages, staying on to support the handover, passing off what he used to carry, and guiding the new owner as he takes the company and the team into their next chapter.
Testimonial
What can I say about Diamond Willow, other than they are amazing!!
I had already tried to get this management buyout done, but the structure was just not workable. Diamond Willow helped rework the transaction in a practical way that made sense for the business, preserved working capital, and aligned the risk properly. The biggest win was that they structured it in a way that allowed our existing bank to step up and provide financing. I have heard this pitch from a few other different merger & acquisition groups before, so I was very skeptical.
Diamond Willow totally delivered on everything they said they would and more. They put the deal out to thirteen banks, ten of the thirteen banks offered to fund the deal. The three that said no, only did so because the deal wasn’t large enough for them.
Diamond Willow totally delivered on everything they said they would and more. They put the deal out to thirteen banks, ten of the thirteen banks offered to fund the deal. The three that said no, only did so because the deal wasn’t large enough for them.
I would highly recommend Diamond Willow and Grant to anyone thinking of selling their business."
A Note from Grant Daunheimer
Partner at Diamond Willow
A lot of Canadian business owners are reaching the point where they want to step back, and their accountants and lawyers usually see it coming first.
