This is Tom’s story.
How to sell a distribution business at the right time, to the right buyer, for the right price is the question Tom had been turning over for two years before he picked up the phone. When the right time came, he called CGK Business Sales. Tom built a $14M food service distribution business in Texas. He had 47 employees, 8 routes, three anchor customers, and a daughter who had told him a year before that she didn’t want to take the business over. He came to us in early 2024 because he was tired and didn’t know who else to talk to about how to sell a distribution business this size. This page is what happened next, and what could happen for you. Tom is a composite, not a single real CGK seller, but the patterns and details are pulled from real distribution engagements.
The night before Tom called us.
Most owners who decide to sell a distribution business have been thinking about it quietly for a year or two before they pick up the phone. Tom was no different. He was 64. He had been up at 4:30 a.m. every weekday morning for 22 years to make sure his food service distribution business ran the way he needed it to. The business did $14 million in revenue, had 47 employees, ran 8 routes out of one warehouse outside Houston, and served roughly 240 customers, three of whom accounted for almost 40% of the revenue.
Why owners decide to sell a distribution business
His daughter had told him a year before that she did not want to take it over. His wife had stopped asking when he was going to slow down. His back hurt more than it used to. He had been approached three times in the prior eighteen months by buyers who wanted to call directly, all of them sounding sophisticated and a little too eager. He did not know what his business was actually worth, did not know whether the buyers calling were good buyers, did not know what he would do with himself if he sold, and did not have a single person in his life who had ever sold a business at this size.
That is the night he found CGK and submitted the form. We called him back at 9:14 the next morning.
The conversation we had on the first call.
The first call was 38 minutes. We did most of the listening.
Tom talked about his drivers, his dispatcher of 19 years, his three anchor customers, the supplier consolidation that had been changing his margins, and the fact that he had not taken a real vacation since 2019. We asked about the business in the way you would ask if you were trying to understand it, not in the way you would ask if you were trying to win the engagement. What we were listening for was not just the financials. We were listening for whether Tom was actually ready to sell, what he was working toward, and whether his expectations on price were grounded in what the market would actually support.
At the end of that call, we set up a working session: an in-person conversation where one of our Managing Directors would walk Tom through our valuation model and tell him honestly what his business was likely to command. We did not promise him a written report. Written valuations involve substantially more work, and we charge for those when a seller actually needs one for estate planning, a partner buyout, a divorce, or another documentary purpose. The walkthrough was free because Tom was clearly thinking seriously about selling, the way someone thinks about it before they actually do it. Whether that ends up being in a year, three years, or longer, we make the same call.
The valuation session was the following Tuesday at 10 a.m. at his warehouse.
Tom was not ready to sell a distribution business yet. He went home and waited fourteen months.
The valuation session showed Tom that his business was worth meaningfully less than he had been hoping. The customer concentration was the biggest issue. Three customers at almost 40% of revenue meant that any sophisticated buyer would either price the business as if those customers might leave, or would structure the deal with a large earnout tied to those customers staying.
We told Tom honestly: he could go to market now and accept the discount, or he could spend twelve to twenty-four months reducing the customer concentration, cleaning up some other operational details, and come back to us with a stronger business that would command a meaningfully better price.
This is the part most brokers skip. Most brokers would have signed Tom that day, taken him to market, and made the commission whether or not the deal was the best one for him. We told him to wait, even though it meant we did not get paid for fourteen months and might never get paid at all if he changed his mind.
Tom went home and waited. He spent the next year diversifying his customer base from three anchors to seven, hiring a general manager he could hand the business to so he was not the only person who knew everything, and tightening up the financials so they would tell a clean story under buyer scrutiny. He read up on the broader distribution sector through trade resources like the National Association of Wholesaler-Distributors to understand what active buyers in his space were paying for. He called us back in March 2025 and said he was ready to sell a distribution business that was finally in the shape it needed to be in.
What we did when Tom came back.
What it takes to sell a distribution business properly
When an owner is ready to sell a distribution business with CGK, the speed surprises them. We took Tom’s business to market in two and a half weeks once he got us his updated financials, customer concentration breakdown, route P&L, fleet inventory, and supplier list. The blind teaser went out to 81 buyers we had pre-qualified across four buyer types: financial buyers (private equity platforms), strategic acquirers in food service distribution looking to extend route density, roll-up platforms, and adjacent distributors using Tom’s customer base as a wedge into Texas.
Fifty-seven of those buyers signed NDAs and received the full Confidential Information Memorandum. Forty-two entered our structured data room. Twenty-two submitted Indications of Interest. Twelve advanced to Letters of Intent. We narrowed to eight for management presentations. Six re-submitted refined LOIs after the management meetings.
Tom decided between two of the top LOIs. They were materially different. One was a higher headline price with a large earnout tied to revenue retention over three years. The other was a lower headline price with most of the value in cash at close. We walked Tom through what each would actually deliver to him under realistic and pessimistic scenarios. The lower headline price was the better deal. He took it.
Through the whole process, the same CGK Managing Director who had taken Tom’s first call fourteen months earlier was the person walking him through every conversation.
What the deal actually looked like.
How the deal looks when you sell a distribution business with CGK
Tom’s deal closed roughly seven months after we restarted the engagement. The buyer was a regional food service distribution platform backed by a middle-market private equity firm. The deal was structured as a stock sale (which had real tax implications Tom worked through with his CPA before signing).
The headline price was meaningful but not the highest LOI he received. About 86% of it came as cash at closing. About 10% was held back in escrow for 15 months to cover indemnification claims and a working capital adjustment. About 4% was a small rollover equity stake in the buyer’s platform, which gave Tom continued upside if the platform did well over the next three to five years and gave the buyer reassurance that Tom would stay engaged through the transition. Wire hit on a Wednesday afternoon in October.
Tom stayed on as a paid advisor to the buyer’s platform for six months after closing, which let him introduce his team and his customers to the new owners on his terms. After that, he was done.
What happened to Tom’s people.
Tom cared more about his employees and his anchor customers than he cared about almost any other variable in the deal. We had screened buyers partly on this dimension from the start: we excluded one early bidder whose track record on operational integration suggested they would clean house in the first 90 days post-close.
The buyer Tom chose kept all 47 employees. The dispatcher of 19 years was given a more senior operations role inside the platform’s broader Texas business. Tom’s three remaining anchor customers were retained, partly because Tom personally introduced them to the buyer’s account team and partly because the buyer recognized the value of those relationships and built incentives around keeping them.
Tom’s daughter, who had been clear two years before that she did not want to run the business, was relieved. Tom’s wife stopped asking when he was going to slow down. He took her to Italy in November.
What Tom told us afterward.
Why owners who sell a distribution business with CGK keep coming back
About three months after closing, Tom called the Managing Director who had run his deal. He said two things that the Managing Director still tells new sellers about.
The first was that the fourteen-month wait between his first call and his actual engagement was the most valuable part of the whole relationship. He said: “If you had taken me to market that first day, I would have left a lot of money and a lot of sleep on the table. Telling me to wait is what made you the firm I trusted to run this when I was ready.”
The second was about the structure of the deal. He said: “I almost took the higher LOI because the number on the top line looked better. The fact that you walked me through what each deal would actually pay out, year by year, in good and bad scenarios, is the thing my CPA and my attorney both told me they had not seen any other broker do.”
This is what we mean when we say we sit with you in the decision, not just the transaction. Tom is one composite story, but the pattern is real. The owners we work with who decide to sell a distribution business usually find their way to us through versions of Tom’s situation, and the relationships start with a long listening session and a free valuation, not a pitch.
Ready to sell a distribution business? Where are you in Tom’s story?
If you are starting to think about how to sell a distribution business, we should talk. There is no commitment and no pressure. The first conversation is free. The valuation walkthrough that follows is free when you are seriously thinking about selling, whether that is in a year, five years, or longer. We only charge for formal written valuations, and only when you actually need one for estate planning, a partner buyout, or another documentary purpose. Submit the form and a senior CGK Managing Director will reach out within one business day.
If you are Tom at month 1: just exploring
You are not sure if you want to sell yet. You are tired or curious or have just been approached by a buyer and want to understand what you might actually have. Most of our best engagements start here. Submit the form and we will schedule a working session. You walk away with a real number and a clear sense of what to do next, with no obligation to do anything.
If you are Tom at month 14: ready to go
You have done the work to clean up the business. The financials are tight. The customer concentration is improved. Maybe you have a buyer who has been calling you. You want to run a real process. Submit the form and we will be in touch within a business day to talk about timing, scope, and what your first 30 days as a CGK seller would look like.
If you are not sure where you are
Most owners are not sure. Submit the form and start with the conversation. We will figure out together where you are. We are equally happy to tell you to wait twelve months as we are to take you to market in two weeks.
Or call us directly at (888) 858-7191.
Start your own story
A senior CGK Managing Director will respond within one business day. Strictly confidential. For owners of distribution businesses doing $1.5M+ in annual revenue. The first conversation and the valuation walkthrough that follows are free for any seller seriously thinking about selling, on any horizon.
Confidential. No obligation. Direct routing to a named CGK business broker, not a junior screener.
One of these eight people would lead your engagement.
One named senior CGK Managing Director stays with you from the first call through the wire transfer, just like Tom’s Managing Director stayed with him for fourteen months and then for the engagement that followed. Our Managing Directors come from Wall Street investment banks, hedge funds, Fortune 500 corporate finance, and operating-business leadership. Cornell MBA. U Chicago Booth MBA. CFA. CMT. Naval Academy. Goldman Sachs. Merrill Lynch. Deutsche Bank. AIG. T. Rowe Price.
What sellers say after they sell a distribution business (and other businesses) with CGK
I could not be happier with the experience I had selling my business with CGK. Greg did a detailed analysis of my business and helped me price and position it right for the market. After receiving multiple offers at full asking price, the rest of the process went very smoothly, and we closed in less than two months.
Hanna M.Selling my business was a once-in-a-lifetime experience, and I’m incredibly grateful to have had Wes by my side throughout the process. He brought perspective, pushed when necessary, and always had my best interests in mind. His experience and strategic approach allowed me to maximize the sale price while minimizing long-term risk and obligations. If I had to do it all over again, I wouldn’t hesitate to choose him as my broker.
Adam NevilleDerik located multiple interested strategic buyers that produced more than one serious offer. The negotiations were tough but Greg and Derik’s experience helped us overcome. We got a great result for our employees and for the owners. We would recommend them without reservation.
Bob TaylorWe sold a business that was 47 years old and being run by second generation within a year of working with Wes. CGK has a system that attracts serious prospects to review opportunities. Wes was able to make the overwhelming feeling of selling easy and to a certain extent enjoyable. I never felt alone or in the dark throughout the entire process.
Jennifer WilliamsWe decided to sell our company in 2025. Talked to another M&A company in the Houston area. We felt very comfortable with Greg and Matthew at CGK. Could not have made a better choice. From day 1 till final closing and even after 30+ days, they have been here helping us with documents and support during the transition. Thanks can not be said enough.
Rickey ThomasInside the Blueprint, on Bloomberg TV and Fox Business News.
Tom’s daughter is the one who first sent him a clip of CGK on Bloomberg. She recognized the firm name and texted it to him before he had decided to do anything. CGK Business Sales is featured on Inside the Blueprint, the syndicated business television series. Our episode aired on Bloomberg TV and Fox Business News. Watch the segment, then start a confidential conversation.
The CGK office Tom called was in Houston. Yours might be one of these.
Whichever office you reach, you get the entire firm. Tom worked with the Houston office because he was outside Houston, but his deal benefited from a buyer pool we sourced firm-wide. Click any city to learn about our local presence and the named Managing Director leading that market.
Other Questions Tom and Other Distribution Sellers Ask Us
Practical answers to what comes up before, during, and after the kind of engagement Tom went through.