Two buddies
from college, Bud Tolman and Darrel Odle, had spent 40 years growing
Chem-Trol Inc. into a large and profitable market leader and now
they were ready to retire and turn the value of their business into
financial security for themselves and their families. Chem-Trol provides
vegetation management services to more than 600 utility and pipeline
companies and industrial land owners throughout the Midwest.
Tolman
and Odle, both 72, hadn’t given much thought to developing
a plan for the eventual sale and transition of their business until
they were in their mid 60’s. They developed solid regional managers,
and with grooming, they reasoned, these core managers could buy and
grow Chem-Trol and protect the future of its 85 employees, as well
as the financial security of the founders.
“First, we sat down with everyone individually
to gain perspective
and understanding.”
Bill Chapman,
Chapman Advisory Group
Lack of Transition and Leadership Plan
Tolman and Odle considered an initial buyout plan put together by
a group of five key managers. This plan never got off the ground
as talks broke down over purchase price and leadership.
A few months later, two of the original five managers approached
the founders again and negotiated an agreement to buy the company.
However, this strategy did not gain the support of the management
team and this buyout plan also failed without any leadership transition.
The entire group was at a stalemate with no solution in sight.
Bill Chapman, principal of Chapman Advisory Group, was introduced
to the founders and tasked with bringing together a fractured management
team and putting the transition plan back on track.
Rebuilding Begins
“We had a group that was barely functioning as a team and the decentralized,
casual management style was making it worse,” said Chapman. “We sat
down with the founders first, and then with the individual managers to understand
the perspectives of everyone involved. We had to build some bridges if a plan
was ever going to take shape.”
One of the critical findings gained from conducting individual interviews
was that hardly any financial information regarding company performance
had been shared and discussed.
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