The Whitlock Household · Sale of Whitlock Fluid Power · October 2026

Two offers for the business, compared on what reaches you.

Corvane’s offer is $3.3 million higher on paper. At closing, the two put almost exactly the same cash in your account. What separates them is everything after closing: how much depends on someone else, how wide the range runs, and what happens to Graham, the team and the building.

Prepared by Alistair Sinclair for Graham and Elise Whitlock · Letters of intent dated October 6 (Ashgrove) and October 9 (Corvane) · Figures after federal and state tax

Headline price

Corvane$28.0M

Ashgrove$24.7M

For the business

In your account at closing

Corvane$12.1M

Ashgrove$12.2M

After escrow, deal costs and tax

Base case, today’s dollars

Corvane$18.9M

Ashgrove$19.6M

Everything received over five years, after tax

Range of outcomes

Corvane$16.6–20.5M

Ashgrove$14.7–23.6M

Today’s dollars, downside to upside

01 · The two offers

Same company, two very different deals.

Both buyers value Whitlock Fluid Power on its $3.8 million of earnings. Ashgrove Equity Partners, a private equity firm, wants the company as a platform to grow and asks you to stay invested. Corvane Industrial, a public distributor, wants your customers and branches and would fold the company into its own.

Ashgrove Equity PartnersCorvane Industrial

Headline price

$24.7M 6.5× earnings

$28.0M 7.4× earnings

Cash at closing

$17.3M 70%

$20.0M 71%, of which $2.0M held in escrow

Paid later or in kind

$6.2M rollover into Ashgrove’s new company
$1.2M seller note, 6%, due in year five

$5.5M earnout over three years, if targets are met
$2.5M in Corvane shares, locked up 12 months

Protection for the buyer

Insurance policy; $124K escrow for 12 months

$2.0M escrow for 18 months

How it is taxed

Treated as an asset sale; $2.1M taxed as ordinary income

Stock sale; all capital gain

Graham

Stays as CEO for three years, $375K a year

12-month transition, $200K

The team and the name

Whitlock name and all 82 roles kept; plan to buy two competitors

Warehouse merged into Corvane’s regional center; about 30 roles affected

The building

You keep it; 10-year lease at $396K a year, rising 2.5% a year

Corvane buys it at closing for $3.25M

Non-compete

Three years after Graham leaves

Five years from closing

02 · At closing

A $3.3 million gap that closes before the wire.

Start from each headline and take out what doesn’t arrive as cash on closing day: the parts paid later, money held back for the buyer, deal costs and the tax due for the year of the sale.

Why the gap disappearsCorvane’s higher price comes with $2.0 million held in escrow for 18 months and tax due this year on $2.5 million of shares you can’t sell until next year. Ashgrove holds back far less but keeps $7.4 million in your hands only as paper: the rollover and the note.

03 · Taxes

Structure decides how much of the gain is taxed, and when.

Ashgrove wants an asset purchase for tax. Through a pre-closing reorganization, the buyer gets to depreciate what it buys again. For you, $2.1 million of past depreciation on trucks, shop equipment and inventory systems comes back as ordinary income at 41.75% instead of capital gain at 24.75%. That costs you about $357,000 more than a stock sale.

The rollover is not taxed until it is sold. The $6.2 million you reinvest carries over a quarter of your basis and is taxed only when Ashgrove sells the company, likely in year four or five.

Corvane is a clean stock sale. Every dollar is capital gain. The earnout is taxed as it is paid, so if it never pays, you never pay tax on it. The shares are taxed at closing even though they’re locked up for a year.

Tax due for the year of the sale

Ashgrove

$4.21M

Corvane

$5.05M

Capital gainOrdinary income from recapture

Federal 20% on capital gain and 37% on ordinary income, plus 4.75% state. The sale is exempt from the 3.8% net investment income tax because Graham works in the business. Your basis in the company is $1.6 million.

04 · After closing

The parts you don’t control.

Each offer leaves real money in someone else’s hands for years. Switch between outcomes to see how each piece and the five-year total move.

Ashgrove

Corvane

Cash after tax by year, business only

AshgroveCorvane

05 · The range

Ashgrove wins the base case. Corvane has the higher floor.

In today’s dollars, the base case favors Ashgrove by about $650,000, almost all of it from a second payday on the rollover. But the spread is the real difference. If Ashgrove borrows heavily and the platform stalls, the rollover could return half its value and the note could be cut, leaving you $1.9 million behind Corvane. If the plan works, you finish $3.0 million ahead.

Corvane’s range is narrow because most of its value arrives within 18 months. Its main risk is the earnout, which depends on sales from your accounts after Corvane has merged the warehouse and the sales team.

06 · The building

The building is its own decision.

Whitlock Properties owns the shop and warehouse, worth about $3.4 million. Ashgrove would lease it for ten years. Corvane would buy it for $3.25 million, $150,000 under the appraisal, as part of the deal.

Over five years, keeping and leasing it is worth about $800,000 more in today’s dollars, and the lease is backed by the company you’re selling. Selling it removes landlord risk and puts the cash to work now. Either choice can be negotiated with either buyer, so we kept it out of the business comparison above.

Keep and lease to the buyer$3.42M

Sell to Corvane at closing$2.62M

Five years of rent after tax plus the building’s after-tax value in year five, in today’s dollars, versus the sale price after a $630,000 tax bill (depreciation taxed at 25%, the rest as capital gain).

07 · Beyond the numbers

What each offer asks of your family.

Graham’s next three yearsAshgrove needs Graham as CEO through 2029, reporting to a board, with the rollover riding on how the company performs. Corvane needs a year of help with customers and then he is free, within a five-year non-compete.

The peopleElise asked us to weigh the team. Ashgrove keeps every role and the Whitlock name. Corvane expects to merge the warehouse and back office, affecting about 30 of 82 roles. A retention pool for key staff is worth asking for either way.

ConcentrationUnder Ashgrove, about a third of your post-sale wealth stays tied to one company you no longer control. Under Corvane, nearly all of it can be diversified within 18 months.

Certainty of closingAshgrove’s financing is committed but relies on debt at four times earnings. Corvane can pay from its balance sheet; its main approval is its own board.

08 · Before you sign either one

Five asks, reviewed by your whole team.

Neither letter is final. These asks would change the comparison the most. We’ll take each one through your CPA and transaction attorney before it goes to your banker, so the numbers, the tax and the legal terms all line up.

Corvane
Replace the $2.0M escrow with an insurance policy, as Ashgrove did. That moves about $1.9 million from 18 months out to closing day.
+$1.9M at closing
Corvane
Tie the earnout to sales from your existing accounts, not combined earnings after the merger, and pay it in full if Corvane merges the sales team early.
Protects $4.0M in years two and three
Ashgrove
Ask them to cover the extra tax from the asset treatment. They gain the depreciation; a gross-up is common.
+$357K
Ashgrove
Cut the rollover to 15% or get minority protections: tag-along rights, a seat or observer at the board, and limits on new debt that ranks ahead of you.
Moves $2.5M to cash, or protects $6.2M
Both
Settle the building separately: appraisal value from Corvane, or a lease from Ashgrove with a parent company guarantee.
+$150K, or a safer lease

How we built this

Outcomes. Downside, base and upside weight 25%, 50% and 25%. Ashgrove rollover at 0.5×, 1.7× and 2.8× in year five; seller note paid in full except in the downside (interest stops after year three, half the principal recovered). Corvane earnout pays year one only, years one and two, or all three; shares sell at 70%, 105% or 120% of today’s value; escrow claims of $600K, $100K or none.

Today’s dollars. Future amounts discounted at 5% a year. The five-year view covers everything each offer pays; Graham’s salary or consulting fee is pay for work and is left out.

Taxes. 2026 federal rates; state shown at a flat 4.75%. Seller note and earnout reported on the installment method. Deal costs (banker at 2% of headline plus $250K legal) reduce the gain.

What’s next. We’ll walk through this with you, your CPA and your transaction attorney on October 30: your CPA on the tax treatment and how the price is allocated, your attorney on the escrow, earnout and non-compete terms. Then we’ll send your banker the asks you choose before the November 13 exclusivity decision.

Confidential, prepared for Graham and Elise Whitlock. Prepared October 2026. Values, tax and outcomes are estimates based on the two letters of intent and the assumptions above; final terms, purchase price allocation and working capital adjustments will change them. This is not tax or legal advice; please review with your CPA and transaction attorney.

This sample interaction is a hypothetical composite with fictitious names. Graham and Elise Whitlock, Whitlock Fluid Power, Ashgrove Equity Partners, Corvane Industrial and Caldermont Private Wealth are fictitious.

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