DOING THE DEAL
IN ASSOCIATION WITH:
WHY EVERY DEAL IS A BIG DEAL
PRESENT:
Ryan Bilsborough PM+M
Steve Brennan Bespoke
Oliver Burton Curly Top
Craig Cheetham
Fellwood Advisory Matt Currie
Seneca Partners
Benjamin Dredge CG Professional
Karen Morris Community Foundation For Lancashire
Chris Howard CFO Centre
David Lenehan Radwell International
Stephen Robinson PM+M
Jason Sharp Greenarc Vehicles
Peter Slater CMAC
Paul Waite Rowan Group
In our latest insight into ‘doing the deal’ we brought together a collection of business leaders who have gone through the process of buying and selling, together with experts and advisors from the world of M&A. In our detailed discussions at The Globe Centre in Accrington we looked at a range of issues.
David Lenehan, Radwell International
David is general manager of Europe at Radwell International, a role he took up after the sale of his Blackburn-based business Northern Industrial to the US group earlier this year.
The sale was completed in five months. The business went from being a relatively small operation to being acquired by our American competition, by the third biggest private equity company in the world. There is stress in selling and I don’t think anyone can really understand that until they’ve been through it themselves.
You’re there, worried the other side is going to get one over on you at the last minute, or that this thing over there might be a potential problem that you didn’t really know about. Then you are trying to work out how you’re going to get paid.
One of the things the business we sold to did really well was to offer equity. If you’re a founder you get equity in the bigger business and it has a plan to then recapitalise at another point in time.
But they also identified top-level managers and put them on the same incentive programme, so they are bought in because they also have equity in the deal going forward.
The initial stress when you get somebody interested in a sale is around how much the business is worth. The next is thinking about your team and is it the right thing for them.
Then there is handing over information to a competitor. It is always in the back of your mind that they are searching for your strengths and weaknesses, and will then go after your customers.
Then you get to the bit where you’re actually waiting for the offer to come in and what’s the right strategy around that.
We got told, ‘It’s a light-touch due diligence’ but these guys own their own legal practice in New York and have one in the UK and their own accountants. We’ve got three businesses we’re selling so we get three sets of questions. You’ve got all that building up but you can’t talk to anybody.
Then there’s ‘What am I going to do after the deal?’ And you end up in my position where you are taking on more responsibility and doing more for the business than you ever thought you were going to do and that journey changes. Now I’m trying to do eight acquisitions in the next 12 months and seeing the perspective from the other side of the table.
The model we have is not to buy businesses where the founder leaves. Leadership in those first few weeks after selling is really important because people are stressed and worried about their jobs, however much you reassure and communicate with them.
SUPPORTED BY:
LANCASHIREBUSINES SV
IEW.CO.UK
21
DEBATE
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