Graham Boyce, President of Jobe and Company LLC, and his business partner had grand plans for the company — a 10-year strategy that included making more acquisitions. Then they were approached by someone about a roll up opportunity, and they decided to jump on it.
“We weren't really looking to sell,” Boyce said at the Baltimore Smart Business Dealmakers Conference. “We were looking to acquire, frankly, and we had a general strategy. In our market, there are a lot of owner-operators, where owners wake up at a certain age and realize they don't necessarily have an exit out of the business. And we thought we were probably too small for private equity and the like, and we felt like we were a great exit for them. We knew a lot of those people and felt like we could, over time, build a business by acquiring these guys. And so we were really excited moving forward. And then we got a call. My partner and I were talking about probably $1 million to $5 million acquisitions, and those who acquired us were talking about $100 million to $500 million pools of capital. So, they had the same idea that we did, just at a much, much larger scale. And they called us. We somewhat knew them. We met with the owner and just really liked his style, felt his values were very aligned with ours. And, somewhat quickly, decided to move forward, and felt like it was a great opportunity. We were the second company, I think, they had acquired. And here we are, less than 12 months since we've sold, and they've already got nine others done, and I think they've got eight more they're announcing shortly. So it's been a very fast ride.”
The sale process, he says, starts friendly. But things soon change.
“It's two business guys talk in a room, and you're all excited about all the great things that you can do together,” he says. “And then the lawyers get involved, and it changes.”
His mindset is not really about deal, but rather operating a business — employee retention and happiness, and driving new business. He’s not thinking about where his records are kept, and all the stuff that comes up in a deal.
“It became a much more rigorous, and at times ridiculous, process than I probably ever really imagined,” he says. “We had three months of due diligence and document requests, and the more you give them, the more they ask for. It's like a never ending spiral. And they had a situation three days or so before the close where they were asking about how we were compensating our employees about their cars. And I was like, ‘You got to be kidding me, this is where you're going to right now, three days before?’ And it didn't phase them at all. I mean, they just had their checklist, and as you gave them their check, they just found another thing to check. So, it's a rigorous process, and it's not one, necessarily, that I'd like to repeat.”
When asked by the acquirer for something that’s out of line with normal day-to-day business, like an I-9 form, it would be troubling because it affected his ability to control the narrative with his team.
“You're going back kind of en masse, saying, ‘Hey, I need an I-9. And they're like, ‘What's going on?’” he says.
Though he felt like the business had most of its documentation in order and would be ready for an acquirer’s requests, being an older company, they had ways of doing certain things that were inherited. But, given the chance to think about it two years in advance, certainly they would have done things differently.
Both he and his partner decided to stay on indefinitely. Part of that was because they were really aligned with the values and the vision of the people that bought them, and that made them comfortable and want to move forward.
“We thought we had a lot of new resources at our disposal that we could go forward and continue to grow and have a good time, take care of our team, set our team up for continued success, and that was really appealing,” Boyce says. “Neither one of us were ready to retire and move on to the sunset. And this was a company that we really felt like we could move forward with and continue to grow.”
Still, the transition has required some adjustments.
“It's a very strange feeling to not be the one in control,” he says. “There's certain things that you have to ask permission for. There's certain strategies that you're not involved in making decisions on. But on the flip side, there's some financial concerns and leverage that I don't have to worry about anymore. So, in terms of what we were trying to do, I think we accomplished it. And more than anything, it's not necessarily good or bad, but it's definitely different now than it was before, and I'm comfortable with that, but it's definitely different, and I got to believe that's going to be for just about everybody.”
For those considering a sale, he suggests having a conversation with yourself about why you're doing it, and really understand why you're making the decision you're making. And while the money is important, it’s also important to be aligned in terms of satisfaction and ensuring that the legacy that you've worked hard to build is maintained.
Also, get a good team together and prepare yourself.
“Get your ducks in a row and just get mentally prepared, because you're going to get put through the ringer, and there's not a damn thing you can do about it,” he says. “So, just get ready.”
