Emotion fills the entire process of selling a business. This is a theme that Kevin Kordek, who sold his pest control company in 2014, kept coming back to in a recent webinar. “If you’re seriously thinking about selling it, the short answer is the business is like a roller coaster ride that you did not buy a ticket for,” he said. “And if it’s a family business, your family didn’t buy a ticket either, but they’re getting on with you and they’re going to be rolling along.”
In February 2014, Kordek sold A-Active Termite & Pest Control in Virginia Beach, Va., to Rentokil. During PCT’s fifth annual M&A Virtual Conference webinar in August, he discussed his experience selling his company, and provided advice to other business owners about how to effectively complete the sale of a business.
CONSIDERING A SALE. Currently, owners of pest control companies are fortunate because of the large industry demand for their companies, Kordek said. It is easier to find buyers in the pest control industry compared to many other industries, he said, drawing from his recent experiences in guiding business owners in various industries through the selling process.
All business owners who are thinking about selling their companies should think about their reasoning, Kordek said. For the longest time, Kordek never considered selling A-Active. Then he started thinking about his lack of a succession plan and what would be best for his employees, customers and family.
The prospect of selling his business and making such a significant life and professional change evoked a myriad of feelings for Kordek. “It was fun (and) it was absolutely terrifying,” he said. “There were days of emotion that come from a place that you don’t talk about at parties. It’s just really deep. It’s thinking, ‘This is the end of the legacy — or the beginning of the legacy?’”
WHAT LED TO A SALE? Before thoughts of a sale emerged for Kordek, the succession plan for A-Active sat with Jeff Johnson, the company’s then-president. However, in 2012, Johnson succumbed to cancer. “When he passed away, I went probably four or five months where I went to work every day and there was just a hole,” Kordek said. “It was just something that was missing — and Jeff’s physical presence certainly was missing, but also the inspiration that he brought to the company.”
In his former role as president of the National Pest Management Association, Kordek had been consistently traveling and spending time apart from A-Active’s day-to-day operations for nearly three years. At the time, Johnson was able to remotely communicate company metrics, wants, needs and other information to Kordek. “We just had a really special thing going,” Kordek said.
Meanwhile, the company was growing double digits, approaching 50 employees and turnover was nearly nonexistent. Kordek thought about the possibility that something unfortunate could happen to himself and wondered, if it did, how his company would move forward.
At a February 2013 pest control meeting in Cabo San Lucas, Mexico, Kordek left the beach to listen to a presentation from Lance R. Tullius, a mergers and acquisitions adviser, and began to seriously think about selling his business. Kordek returned to the beach to meet his wife Mary Beth Kordek, who at the time served as A-Active’s chief financial officer, and told her he was considering a sale.
Kordek hired Tullius as an adviser in May 2013, and Tullius started a company analysis of A-Active in October of that year. Kordek, Tullius and their team met with five buyers in December. Following three days of due diligence in January 2014, A-Active closed with Rentokil on Feb. 1, 2014.
GOING THROUGH WITH A SALE. The sale of a business can take as short or long as the owner wants it to, Kordek said. For him, it was a relatively quick process. “I had made the commitment, and I refer to it affectionately as having to get a divorce from the company, because I was so emotionally attached to the people and to the customers and to the business and to all of those things, that it would be the equivalent of divorcing the woman you love more than anything in the world who has never done anything wrong to you,” he said.
But Kordek has not had any regrets or felt seller’s remorse since going through with the sale of A-Active. In retrospect, he has thought about the negotiation process and realizes that sure, he might have walked away from money on the table, but his biggest concern was finding the right cultural fit for his company, and he was able to do just that.
Business owners who have decided to sell should keep a specific number in mind, Kordek said. “If your number is X, be prepared to say, ‘I will accept nothing less than X unless somebody can explain to me why,’” he said. “And if they can, then you need to be prepared to accept the reality that (your business) might be worth less than you say.”
Many people warned Kordek due diligence would be a horrible experience. But that wasn’t the case for him. Not only did Kordek not despise due diligence, he enjoyed it. He was able to show off A-Active’s successes over the years and revisit some memories along the way.
After the company changed hands, Kordek stayed on for six months to assist with the transition.
LIFE AFTER THE SALE. One of the most important lessons in selling your company is to have a post-sale plan, Kordek said. “What I’ve seen happen when a lot of folks sell their business (is that the) emotional roller coaster turns into a train wreck because they didn’t have any plan on what they were going to do next,” he said. “They woke up one day and said, ‘I don’t have a company anymore. I don’t have employees. People don’t need me. I’m not important anymore.’”
However, Kordek had a plan. Since he sold A-Active, he started a consulting business. He has spent more time with his parents and children; he writes, travels, scuba dives, fishes and golfs. “I’ve also grown as an individual because having been through this experience. It brings a lot of the things that you go through as an adult, to closure,” he said.
There is no such thing as an informal sale, Kordek said. “And you can stay on, work for them, work with them, but once you’ve sold it, it’s not yours anymore. They can make changes. If you sold them a black Cadillac and they want to make it a pink Cadillac, they own it.”
The experience was overwhelmingly positive for Kordek and his family, and he has familiarized himself even more with how businesses sell. “I would do it all over again, even and especially knowing what I know now,” he said.
The author is a Cleveland-based freelancer.