David W. Gray, CPA, CA

The Client

ABC* Fuels Limited, a second generation family business jointly owned and operated by three siblings provided heating oil to consumers in southwestern Ontario.

The Problem

When one of the brothers was diagnosed with cancer in his mid-forties, the family was in shock. From this crisis, combined with outside threats from consolidation in the fuel oil industry and ever-increasing government regulations, the family realized they needed to quickly make a critical decision about the future leadership and ownership of their
business.

The Approach

David Gray of Pacesetter Consulting facilitated several meetings with each family member and spouse to bring clarity around their personal financial, relationship and emotional needs. In identifying their vision for the future, all options were examined.

Could the remaining two siblings carry on the business? Did they want to? Was that the best direction for the business? Could one sibling run the business with key non-family executives? What would the post-transition picture look like for those no longer involved in the business?

Ultimately, the family determined that selling the business to someone outside the family was the best option and that the sale should take place as soon as possible. The assets of
the business were inventoried and a valuation completed. Changes that would encourage immediate offers to purchase, but were relatively effortless and quick to execute, were identified and implemented.

The next step was to work with each individual’s financial planner to prepare a comprehensive financial plan that would not only meet the needs of each family member, but also the family unit as a whole The family members were delighted that the asking price would net them the capital required to maintain their respective lifestyles.

With brokers typically taking 10% commission on a sale, the family asked David Gray to take the lead in finding a buyer. First, David helped them identify the preferred characteristics of the new owner. They wanted a buyer whose top principle was superior customer service (the family would continue to live in the community after the sale and
wanted to ensure their customers/neighbours would still be well looked after), and a buyer who would pay most of the asking price on closing (so that the family could ensure
their financial independence and maintain their lifestyle).
With David’s help, the owners short-listed the top two most suitable buyers and a letter of intent was obtained from both. Negotiations resulted in a bidding war. The family chose

A word from the successful bidder

This deal was definitely a win for me too. Pacesetter handled all the details in a way that my needs were also met.
It was worth paying a little more for a deal that was so smooth to the finish.

Not only was the business ready for sale but the family were prepared to sell. David Gray had obviously worked through all the emotional aspects of the sale in addition to the legal and financial details.

What a difference this time around!

A few years ago, I was involved in a deal that collapsed at the eleventh hour. There were too many critical
details that hadn’t been checked out by the selling broker. It sure was a pleasure to deal with a professional
who was not only proactive in resolving potential issues but was very respectful of my time.

I would be more than happy to negotiate with DW Gray in a future acquisition.

. . . .and the competing bid

I have been involved in a number of deals but none as professional and organized as this one. I highly
commend DW Gray for the superb job they did in overseeing the process with great respect for all parties concerned.

The offer from the buyer whose principles and values more closely mirrored their own . As part of the deal, one of the siblings was retained to work alongside the new owners to assist with the transition.

The Outcome

While the family were overjoyed with the process and the terms of the sale, they also realized that had they been more proactive, they would have had a transition and contingency plan in place long before the need for either could arise. However, being in an industry that was deeply entrenched in consolidation proved to be a silver lining. They were able to sell quickly and at a price far beyond their expectations.