Mark Abare has sold one business in his life: Plastics Distributors and Fabricators, Inc. It’s a business he spent much of his life building. The experience, he says, was something else.
“When I got into selling the company it was definitely an interesting experience because there were so many things I didn't know. I didn’t know whether it was going to sell or not,” he said at the Boston smart Business Dealmakers Conference. “It was it was quite a process. I had plenty of surprises along the way, things I didn't understand or even know was coming up. When I went through due diligence, they were looking at things that I just wouldn't even imagine they knew existed — I didn't know they existed. So, it was very important to get prepped up, hear these things and keep going.”
Heading into the process, he says he wanted it all — he wanted his employees to be secure and get as much money as could for himself and his family since he spent a lifetime working on it.
Doing a sell-side quality of earnings made sense to him because he believed it would make the deal go fast, make everything clear, and spell out where his weaknesses were right away. And because the economy is fluid, he says he was a little anxious to get the deal done.
Trying to run the business while in the diligence process was very stressful.
“Thinking about my employees, thinking about customers — the numbers were dropping; we did have a problem,” he says. “It was actually paralyzing because you're very deep in diligence and things are happening that are out of your control. It was somewhat of a panic to some degree, like, well, I guess I'm just going to have to let this play out and see what happens because what am I going to do? I only have so much time to do it. It definitely is stressful. That was probably one of the biggest things was preparing yourself for what's ahead with emotions and everything else.”
There was a lot to be concerned about. At one point, he says the deal got repriced, which meant considering a different number. And at the same time, the economy slowed. But ultimately, they struck a deal and made it happen.
There was also other uncertainty to deal with, such as when to tell his employees.
“You don't want to tell your employees because they've all been with you for 20, 30, 40 years and you don't want to let them down because next thing you know, the sale doesn't happen, and everybody quit on you,” Abare says. “So, the stress of that is amazing. I think I lost like 15 pounds in a couple of weeks when it was getting close. My appetite wasn't that great. All I could do was wait for a Zoom meeting because I didn't want my head to get involved with any of the day-to-day stuff because I might screw up the deal by not being ready for the call. It's definitely a stressful journey.”
While the process was a great education, he says he wished he knew more ahead of the process as it could have led to earning more money from the transaction. Still, there weren’t any surprises because they did the homework and studied the business ahead of time. But one regret might be telling his employees about the deal.
“Probably my worst thing was really telling the employees what I was doing and working on,” he says. “I was holding off on telling employees until the very — I had to know it was a sure thing. I didn't want to tell them if maybe there was a deal to be had.”
