In the world of business acquisitions, there are valuable lessons to be learned from those who have successfully navigated the complex landscape of selling their companies. One such individual is John McCann, who, in 2017, sold The Bolt Supply House to Lawson Products (NASDAQ: LAWS). McCann’s approach to selling his company was not just about the transaction; it was a strategic journey that involved learning from potential acquirers.
An Unconventional Approach
McCann’s strategy set him apart from the typical approach to selling a business. Instead of simply waiting for the right buyer to come along, he took a proactive stance. He invited prospective buyers into The Bolt Supply House, not with a firm commitment to sell, but with a genuine interest in understanding what these acquirers saw in his company.
Listening to the Suitors
For McCann, these meetings with potential acquirers were not just formalities. He listened attentively to what they had to say. What did they like about The Bolt Supply House, and what aspects raised concerns? By engaging in this dialogue, McCann gained valuable insights into how outsiders perceived his business.
Learning from Setbacks
Not every interaction resulted in a successful deal. One notable encounter involved a giant European conglomerate that initially expressed interest in acquiring The Bolt Supply House. However, after a thorough evaluation, they decided to back out of the deal. Their primary concern? McCann’s central distribution system.
Turning Challenges into Opportunities
Rather than viewing this setback as a failure, McCann embraced it as an opportunity for improvement. He thanked the European conglomerate for their time and set out to transform his distribution system into a masterpiece. This move would later become a significant selling point when pitching his company to potential buyers.
A Strategic Transformation
McCann’s commitment to enhancing his company’s value paid off in spades. Over time, he turned The Bolt Supply House into a world-class operation, a strategic gem poised to attract a wide range of suitors.
The Premium Sale
When the time finally came to sell, John McCann was in a commanding position. He was not just selling a business; he was offering a strategic opportunity. McCann leveraged his well-built company to command a premium price. The market recognized the value he had created, resulting in five competing offers for The Bolt Supply House.
The Ultimate Deal with Lawson
In the end, Lawson Products emerged as the successful suitor. They were drawn to The Bolt Supply House for various reasons, one of which was the transformation of the distribution system that had once raised concerns. For McCann, this sale was the culmination of years of hard work and strategic planning.
The Power of Listening
McCann’s approach offers a vital lesson for business owners considering selling their companies. When a significant and sophisticated acquirer expresses interest, it can be tempting to decline a meeting if you’re not immediately ready to sell. However, as McCann’s experience demonstrates, listening to what these acquirers have to say can provide invaluable insights.
Avoiding the Prop Deal Pitfall
While listening to potential acquirers can be immensely valuable, it’s crucial to avoid getting caught up in a “prop deal” – a transaction that lacks genuine intent and serves only to tie up your business unnecessarily. McCann’s success lay in his ability to extract insights without compromising the integrity of his business or his readiness to sell.
Conclusion – The Art of Strategic Listening
John McCann’s journey from a curious listener to a premium seller offers a unique perspective on the art of selling a business. By embracing the opportunity to learn from potential acquirers, business owners can gain valuable insights, enhance their companies, and ultimately command greater value when the time comes to sell. It’s a strategic mindset that can turn every interaction into an opportunity for growth and improvement, making the journey to selling a business as valuable as the destination itself.
