Insights & News

“I tried to make a point of seeing the deal through the eyes of the buyer …”

INSIGHT: View all Insights articles.

Andrew Sesemann has sold two companies with BCMS - family businesses that had been trading since Queen Victoria was on the throne. Who better to explain the emotional and commercial impact of selling up? “This is not something you can do part-time,” he says…

A businessman, entrepreneur and MBA from The London Business School, Andrew Sesemann worked for the London Stock Exchange and Danbury Mint before agreeing to join the family business in 1996. In 18 years as Managing Director of Cox Agri Ltd – a company specialising in a wide range of agricultural products including tags and shearing equipment – Andrew developed the company significantly. Under his management, the company restructured, relocated, and diversified its product range, securing a number of exclusive distribution agreements.

By the time Andrew sold the business in 2014, Cox Agri was a key player in its sector, holding significant UK market share in its areas of operation.

Andrew has worked with BCMS on two separate occasions. On Andrew’s behalf, BCMS negotiated the sale of Cox Agri Ltd to the Allflex Group in 2014, and the sale of Cox Orthopaedic Limited to Mobilis Healthcare Group in 2007.

Here, he offers his perspectives on selling up. What he has to say will resonate with entrepreneurs everywhere.

Movements in your marketplace had a direct impact on your business…

Like many sectors, the agricultural products industry is fairly close-knit. My buyer, Allflex, was a competitor, who had at one point been our key supplier. I knew them fairly well. I sat on a committee in the UK with the head of the UK Allflex business – he was chair, I was vice-chair. Even though we were direct competitors, we had a strong relationship.

My industry was cattle tags, and Allflex was the No 1 in a global industry, with a track record of buying companies and being totally dominant in the markets they operate in.

The momentum shifted when there was a major company acquisition in our industry, when the second-largest company worldwide bought my key supplier. That changed the game significantly.

Within hours I got a text from Allflex saying “Fancy a coffee?” I thought there would be a contact from him, because of the merry-go-round taking place in the industry. I assumed immediately that meant he was interested in buying us. So I said yes to the coffee.

A text followed by coffee – an informal way to start proceedings!

I thought he was going to make an offer, but at that point I was mistaken – he actually want to supply us as he thought my supply chain might be under threat. Essentially his had been a sales call, not a buying one!

But I knew a deal would make commercial sense for both of us. As I sensed the meeting coming to a close, I asked him straight: “In a perfect world, if you could buy any company in the UK, who would it be?”

So he thought about it, and he came up with two names: my company, and another. I told him that the fact that my supplier had been acquired had made me have a complete rethink about my options. I told him: “I can make my own products, get another supplier. I’m only 50-odd – I can even sell the company. I’ve got options...” I am a very systematic guy, and I like to put values on options.

I wasn’t committing to anything, but he immediately said he’d talk to his board. He got back to me very, very quickly – which from my perspective was clearly a green light.

You had sold a business before, though, which must help…

Yes, that was a much smaller concern. But the fact I had experience, and because I could see the market clearly, meant I didn’t have a fear of selling. I knew – as soon as I got the green light from my buyer and his board - that I would come to BCMS for advice. I did that within days. I liked the BCMS model, and I knew it worked. I am an economist by training, and a little bit of competition has to make sense to get a fair price.

It was also useful that BCMS had negotiated the sale of another competitor of ours, in a slightly different area. This created a great shortcut when it came to profiling additional potential acquirers: I knew that BCMS had clear contact with the marketplace, and understood potential buyers in the industry.

I can’t discuss all the details of the deal for obvious reasons of confidentiality, but BCMS had dialogue with around 10 companies. My buyer knew we were talking to other parties, which I am sure influenced their thinking.

What impact did this competition have for you?

It was huge. I actually didn’t want BCMS to contact other companies. I knew I wanted to sell to my buyer, and I thought we could just go ahead having given the impression there was competition.

But BCMS convinced me that it wasn’t a good idea to have all your eggs in one basket, and advised me otherwise. It was clearly the right the thing to do in retrospect. If you genuinely have no Plan B, then a buyer will sense that. It’s too much of a risk not to assess all your options.

Your business sold remarkably quickly. Why do think that was?

One of the reasons this deal went so well was that my buyer knew the industry, and knew how to buy companies. To make the point: they have made some major acquisitions since our deal took place.

For a business owner, selling might be a once-in-lifetime experience. But companies like Allflex buy other companies all the time. This meant they were utterly serious, professional and pragmatic about negotiations.

We had a beer a couple of weeks afterwards – the buyer, my BCMS Lead Advisor James Pugh and myself. James has sold lots of business, and my buyer had bought lots of businesses. They know the rules, and my buyer absolutely stuck to them. He knew he couldn’t approach me directly on matters.

What would be your advice to a business owner who has received an approach?

You’ve got to get someone else in the frame, not just the buyer who has made an offer. You’ve got to get competition, because you just don’t know what else is out there.

The crucial factor – and this came up in my first company sale with BCMS – is that I was told there was a good chance I could sell to a company I had never heard of. In an industry like ours, I thought that was impossible.  I thought that was marketing speak.  And yet I did. In that first sale, I would never have approached the company that finally bought me. They wanted to get into London, and I was a specialist in the London area –there was a clear fit.

Every industry is different, of course. I have sold in two areas now: agricultural products and healthcare products. In both sales, getting a competitive environment was so important.

Business owners often tell us that selling a business can be lonely…

Yes. Even if you’ve done it before, selling a business is an intense experience. Apart from BCMS, the only person I told about the sale who could give me advice was a part-time Financial Director who came in once a week. I confided with him at a very early stage.

He liaised directly with BCMS, delivering all the detailed financial information required for a transaction.  I genuinely believe it if hadn’t have been for him the deal would have taken months longer, and I told him so. Having access to all the financial and administrative documentation required – putting your house in order, effectively – is a key factor in successful deal-making.

What does taking the decision to sell actually feel like?

It’s like scaling a vertical cliff. It’s a huge, huge step. In many ways, speaking to someone else, rather than keeping the idea internalised – makes it real. I felt this particularly when I sold my first business. Once I’d talked about it with someone else - and the world hadn’t collapsed around me! – that made it easier.

I had been to a seminar with BCMS a year or two before my first sale, because I’d read that as a business owner you should always bear in mind how to sell long before you actually need to or want to! I am the kind of person who likes getting their ducks in a row.

Any advice, material, or information you can get – like the information BCMS provides – can break down that vertical cliff into smaller steps. It makes that huge decision a little bit easier to make. A little bit of hand-holding goes a long way.

You have said that selling a business was an intense process, like being in a tunnel…

I was probably an extreme case. What made it hard for me personally was that my business was based 300 miles from my home – I would fly up there two days a week. The only thing I was interested in at that time was getting the deal over the line, and that was right for me. And I didn’t have a moment or an ounce of energy spare for anything else. And you don’t want to get too emotional, want to raise your hopes too much beyond the details of the deal, just in case those hopes get dashed!

I really tried to make a point of always seeing the deal through the eyes of the buyer.  He, after all, is the person who will see the value in your business. He’s not interested in my emotional baggage.

How did you maintain focus?

Like many business owners, I didn’t tell anyone I was selling. During the sale process I literally had two lives. I am very organised, so I could find things very quickly. I created a separate email account, and had phone lines at home specifically to deal with calls related to the sale. But I still had to run the business as well. Fortunately as I was working from home three days a week I had no problem with privacy initially. In the latter stages, when I was travelling up to the office on business then it was very, very difficult to take phone calls. You can’t sell a business from an open plan office!

Selling a business is not something you can do part-time, to be honest. I think that the fact that I had sold before meant I knew I needed to be responsive, focused and reactive to any queries. I think that’s what helped the deal get done so fast.

And doing that without an advisor in your corner? Forget it.

Deal-making is all about people. What value did James Pugh, your BCMS Lead Advisor, add?

James was fantastic to work with. We probably spoke four times a day, for four months, and over hundreds of emails. We shared a sense of humour, which really helped us hit it off. That meant that throughout the sale, we had constant outbursts of laughter. In fact the harder things got, the more one of us would interject with a funny comment, and there was an immediate release of tension. That was crucial. This applied to the buyer too – we all got on well, and we actually had some three-way conversations on the phone where there was a lot of laughter.

Looking back, it was brilliant the way James smoothed the deal. He pre-empted problems, flagged up potential difficulties, and forewarned me of any major issues, which of course meant they became much less momentous later on. Those interpersonal, management skills were decisive. James has worked on many, many deals – and even sold a company of his own – and I really felt his experience on my side, always.

How did you feel post-sale?

Honestly? In retrospect, I had a bit of an identity crisis. First off, I was in a complete state of euphoric shock, and I kept saying “I don’t believe it! I don’t believe it!” It was truly bizarre: we signed at 6pm in Birmingham, and by midday the following day I was on a beach in Corsica.

I pinch myself every single day, especially on a Monday morning. I did a lot of travelling last year- including walking holidays, on my own. I love being outside, and getting away from it all was key. As the months went by, I started to find the person I was 30 years ago, which had been beaten out of me by the pressure and stress of leading a business and trying to have a life at the same time.

Now I’m working as a business mentor, including with a couple of trusts helping young entrepreneurs. I am trustee for a local hospice. Nothing full time!

Running a business definitely changed me. Now, I’ve got my life back. It’s a different world, and I cannot believe how lucky I am. 

Posted Apr 2018
All BCMS Insights