MERGER SHE WROTE
Merger She Wrote is a podcast for business owners looking to scale, sell, or transition their companies. Each episode unpacks the strategies behind successful exits, the pitfalls to avoid, and the steps to maximize value. Featuring expert insights and real-world case studies, this podcast helps you navigate the complexities of M&A with confidence. Whether you're planning your next move or just starting to think about the future, Merger She Wrote gives you the knowledge you need to make informed decisions and build a business buyers want.
MERGER SHE WROTE
EP 10 | Understanding the Real Risks of Private Equity Partnerships
Would you sell your family business if the money looked right, but something felt off?
Amber Finley of Bug Off Pest Control shares what happened when a surprise buyout offer landed in her inbox. What started as a dream deal quickly raised red flags and forced her family to choose between a fast payout and their long-term legacy.
Hit play to hear the red flags, tough calls, and lessons every founder should know before saying yes to a deal.
In the world of business. Not all deals are what they seem. Fortunes rise, empires crumble, all with the stroke of a pen Mergers, acquisitions, hostile takeovers. Welcome to Mergers, she Wrote, where we examine strategies and stories behind the biggest deals in business, because in M&A, the real risks are the ones you don't take. Welcome back to Merger, she Wrote. I'm your host, paloma Goggins, business attorney and owner of Nocturnal Legal. Today I welcome Amber Finley. She is co-owner of Bug Off Pest Control, which is located in the East Valley. Thank you so much for being on today. Thank you for having me. So on this episode today we are going to cover what makes a business attractive to private equity or any other potential business buyer, and then when it is the right time to say no to that potential offer that comes in out of nowhere from a potential buyer. So, amber, we'll just dive right in. Sounds good. I know you've spent the last 13 years in pest control, so please tell us like how you guys got started as a family business, and I know you work with your brother, corey.
Speaker 2:Yes, so it was about 2006, 2007. My brother was actually working prior to that for a big pest control company and he really liked it and so him and my dad kind of decided that maybe they should start something with just the two of them. My dad was kind of behind the scenes Initially. He helped my brother quite a bit. My dad has his own business, but my brother basically had to start from scratch spraying houses for like 20 bucks a pop, you know, just trying to build a client list, and then ultimately after a few years I came on and then that way we were able to grow and obtain some city contracts and keep us busy that way.
Speaker 1:Nice, very cool. Well, so you know I love I come from a family owned and operated business background myself, so I love working with family owned and operated businesses, and so tell us a little bit about your dynamic, like how has this played out? You know, being in a family owned and operated business? Um, I think there's a lot of people out there that you know. Before we dive into like the, the buying and selling piece of this podcast, I'd love to just hear your opinion on.
Speaker 1:You know what's it like to be in a world where you're working alongside your brother Um you know it's got its pros and cons for sure.
Speaker 2:Mostly pros, of course. But you know it's when we first started my mom was actually doing the scheduling for us and the phones and everything, and then my brother, his wife, eventually took over. So it's like full family, the dynamic. You know we have like our monthly or our weekly phone conferences with the four of us. But I would say for the most part it works out pretty well. I mean, you know he's got his life and his schedule, I've got my life and my schedule. We don't actually have to work together very often anymore. We used to work together a lot more. I think that working separately helps the dynamic as well.
Speaker 1:No, I can see that I, having you know provided counsel to my parents' company in the past, it adds a whole new layer of complexity when you're providing. I always joke with my clients. I'm like I like to advise, based on the fact that, like, I treat you like my own family right, because I've been in that position directly. So I know you know your, your concerns, your pains, your worries, but also I know how difficult those conversations can be, um and and having to to tell your opinion to somebody who you don't just get to leave at the office at the end of the day can really make a difference. So we're sitting down today because you know you guys had a private equity company approach you with potential interest to buy the company and you know, tell us a little bit about how that first connect.
Speaker 1:Because I feel like in the world of business ownership there's a lot of times when I hear from clients that say you know I got a random offer and sometimes they come in hot right Like people get an offer and it's they. Had no intro, no prior conversation, no, get to know you. They just call or send an email or send a letter with literally a dollar figure in the in the offer? Yes, so tell us what was your experience.
Speaker 2:So it was literally my dad receiving a letter and it was just they were showing interest. Um, there was no like offer up front. Um, it was just saying if you're interested, then please contact us. And my dad kind of almost jokingly said, hey, you know, I got this and this isn't the first time that it's happened, but this is the first time that we actually like pursued, you know, just kind of seeing what would happen. So that was the initial thing, was just a letter, and then we all discussed it and contacted them and just to see where it went, Nice.
Speaker 1:So what were those first kind of conversations like? Was it a fact finding mission for them? Was it more casual get to know you? I would assume they asked for financial information at some point in that process they did so.
Speaker 2:Yeah, that wasn't like the initial thing. It was mostly um, if I remember correctly. I think that they kind of wanted to tell us what they could offer us. You know they kept. You know they really wanted to take us to lunch. We never went to lunch with them, um, but uh, they they were. They really showed a lot of interest in that city contract we have um initially, and then, uh, from there they, they requested certain things and then they came back with with an offer. And you know there was some back and forth with that Um, but it was just very matter of fact, like no emotion, um, you know they definitely don't care about like the legacy of something like a family business which you don't expect them to. But, um, it was just more. You know, this is what we have, this is what we want, that kind of thing was the expectation that you and your brother would stay on and operate.
Speaker 1:That was an option.
Speaker 2:So we were given an option where we would be given more money outright and walk away or stay on, and they had offered us an evergreen offer.
Speaker 1:Quote-unquote evergreen offer.
Speaker 2:You know, there's always fine print, but they were willing to give us the salaries we're getting now. Um, you know, they had to make it a point that it's more than what their technicians are making and things like that. But, um, yeah, I mean they, they made it sound really good. Um, and then, the further we went, we started getting legal advice. So definitely recommend that.
Speaker 1:Well, and I was going to say too I think it's almost ironic that you know they had to underline or emphasize this fact that like, oh, we're willing to keep you on, but just know that you know your salaries are more than what's standard. And it's like, yeah, we're owner operators Of course it's not going to be standard. I'm not employed by another company and I'm getting like market salary.
Speaker 2:Yeah, exactly. And then not only that, but like the amount of experience we have. Like myself, I have 13 years, my brother has more than that, so we're not just like your average. You know the turnover rate for pest control technicians is pretty high, considering you do two months in the summer, and you know. So it's not you, you know.
Speaker 1:I thought it was interesting that they pointed that out too yeah, well, so I and this is a total sidebar but are you guys from Arizona originally? Okay, so, like you are just, you know, accustomed to the summer, definitely acclimated, but it gets harder with age.
Speaker 1:I will say that I'm not like 22 anymore well, that's good to know because, uh, I feel like there's first and foremost running into you know, people who were born and raised in Arizona. I feel like it's getting more and more rare, um, but also to hear someone who you know is a an Arizonian um say that you know the heat does get to you, uh, at least gives me some comfort as a as a Midwesterner that's moved here. Um, I always struggle with the transition from spring to summer every year.
Speaker 1:Um but then of course you get the flip side right. Once you've lived through 113 for like three months, the winter drops to a hundred and you need a sweater and you're like.
Speaker 2:what is this? It's so true, my body is not cooperating? Right, right.
Speaker 1:Right, okay, so you kind of got this letter in the mail. It was sort of it was on, you know, unprovoked. You guys decided as a family to reach out. They really wanted to get lunch and you didn't go with them. Was that a strategic decision, or was it just something you guys were like?
Speaker 2:eh, waste of time. I mean, I love lunch, but I don't think my brother and dad really wanted to go, so I was like, hey, it's lunch, yeah.
Speaker 1:Yeah, I mean it's probably, you know, fully paid for. Um, no, that's funny. I I have to wonder from the you know whether it's private equity or any other potential business buyer for someone who offers to go to lunch. And then, let's say, the success rate of going to lunch is, you know, on the higher side sure and what? What percentage of those people end up getting sort of talked into a sale because they sat down to lunch yeah and it's easy to get more.
Speaker 1:I don't want to say bambooz, but I think like this, dropping your guard because you're breaking bread and you know somebody is paying for lunch, and all of a sudden there's that weird unspoken like you gave me something for free and now I have to give you something back.
Speaker 2:Yeah, I can see it as almost like a predatory tactic, like if, for instance, like my brother and myself went to lunch without my dad I mean, who knows what we would have signed up for my dad's pretty business savvy. He, he, like I had said, he owns his own business that has been very successful and so thank goodness for him because he's he's kind of the uh, he's the mediator, but he's also like the person that makes the most sense. He's like the Yoda.
Speaker 1:Yes, exactly, exactly, gotta consult the elder on what should be done and what shouldn't be done. No, I like that well, and I was gonna say too to anyone listening who goes to lunch and doesn't think that you couldn't get yourself in a bind from a napkin contract there are literally cases out there that were litigated based on parties putting stuff down on a napkin and both signing even though it has no structure and it's just a bunch of terms saying like well, you both signed and you reached mutual agreement.
Speaker 1:And and now someone's looking for a specific performance, which is really just fancy terms, saying I'm forcing you to perform the contract, yes, um. So anyone who thinks about going to lunch and having someone potentially slide them over a napkin and not thinking that that could be real and an actual legal contract, you know, buyer beware essentially right.
Speaker 1:Yeah, no, that's so food, food for thought. So, you know, give us a little bit more background on. You know, on the city contract was a big thing for them, obviously anybody who is looking for businesses to buy. I know their perspective on client concentration versus the ability to look at a market and see how much of the market has been penetrated by that business. You look at a market and see how much of the market has been penetrated by that business. You know, between the two of us, you know we've been talking about how you guys have a lot of the East Valley in Phoenix covered by your services, and so I'm sure that was a huge factor for the private equity company too. Was there anything else that they communicated to you, or what do you think made you guys attractive to to even receiving that letter? Was it part of their portfolio? Perhaps was in that sort of industry space or anything else that you could?
Speaker 2:potentially share. I think that they were just trying to cover all bases and so they were going after um companies in specific areas that had good coverage of these areas, and so we were one of like the last. You know. They were like, okay, east Valley, gold Canyon, specifically, like they are doing a ton of work in there and Gold Canyon is growing like crazy. So I think they just wanted to obtain something that you know was covering that spot, and they had mentioned that they were going to open up offices in the East Valley and different things like that. So I really just think it was that more than anything.
Speaker 1:Yeah, well, and it's very possible, right? So I mean from a private equity standpoint. Right, they're probably, you know, peppering the area with letters and then seeing who writes back and then kind of delving in further to determine what's a good fit and what's not. Yes, yes, so do you know? Did they have other pest control companies in their?
Speaker 2:portfolio. They had bought one and I don't know if I'm supposed to say business names, but they had bought one. That's pretty well established. They specialize in budget, termite work, so, and I think they also do pest control as well, but I know that they had obtained that one for sure Um. And then there was maybe a couple more mentioned, but there's. Their plan was to buy several Um, and so that was another thing. I was like, well, if these guys are doing it, then you know it must be legit.
Speaker 1:Well, and then you know it's funny, there's this, this there's very much a dichotomy out there. Whenever I post content online about private equity, you've got, you know, 50, 50. There's 50 percent of people who are like private equity is, you know, the evil villain of the acquisition space, right? They're taking all these mom and pop, family owned and operated businesses and, you know, not churning and burning cause that's not the right word but essentially turning them over into, like corporate conglomerates. Sure, kind of like what happened in the health space, right? So there's like this, like 50% of people who think, you know, private equity is not the answer to this solution, right? And then there's the other 50% who looks at private equity and says, well, that's the highest offer I've got ever yes and why wouldn't I take it?
Speaker 1:I am about to retire or I'm about to go.
Speaker 1:You know, switch gears and this is probably the best roi on all the time and money I've invested on my business so I think it's a really hard balance to strike between the two, because you have, you know, inevitably it's this whole and I hate to liken it to like this idea of you know, um, conservation, but like, okay, for example, you know, I remember there was like news stories online about how, you know, stop buying canned tuna, right, and all the, and you know, but I like there's still people out there buying the canned tuna.
Speaker 1:So the people who are making a canned tuna, right, and all the, you know, but like, there's still people out there buying the canned tuna. So the people who are making the canned tuna aren't going anywhere. Right, and the whole process and production isn't going anywhere either, because you've got, you know, half the people still buying and half the people, you know, boycotting, sure, and same kind of applies to the private equity space. Absolutely, you've got a decent amount of people who are still doing it and so inevitably, private equity or these larger corporate buyers aren't going anywhere.
Speaker 2:Right, oh, no, yeah, no, I'm sure that's very true.
Speaker 1:So take us into some of the negotiation and obviously I know you know personally, since we've worked together, sort of some of the pain points, but you know, explain what really made you guys go from we're interested in hearing more to hit the brakes to then ultimately deciding not to sell Um so, basically, I and I don't remember exactly when you came into the whole picture, but, um, you know, it was kind of one of those things where it was like, well, this seems too good to be true.
Speaker 2:Um, and some of it wasn't. I mean, some of it was, you know. I mean there when we started to realize that they could basically have our customer list and our accounts and walk away at any time without you know there. No earnest money, um, non, you know nothing non-refundable. Just they wanted our information and then they, in their contract, had the ability to walk away whenever they wanted to. And so that's when it was like, okay, this is too much of a gamble. You know, if I was close to retirement age, if my brother was close to retirement age and he didn't have a family, then it would be like a no-brainer. But it's like, you know, there there were things where I'm like this seems like it could end badly.
Speaker 1:So yeah, no for sure, and I think that that risk inherently exists anytime, even with earnest money. Right and so for. For anyone listening who is like what is earnest money? It's essentially a deposit, like when you're buying a house and you put down earnest deposit on the house maybe it's $4,000, $10,000, whatever it is that you've agreed to and that money could potentially be forfeited if you just elect to walk away. And you know, one could argue at what point are these potential buyers, whether they're corporate buyers or not, just going out and buying information at?
Speaker 2:a premium.
Speaker 1:That was the concern, for sure, because I mean, even if you did get to a point where there was earnest deposit, that was going to happen, what value could you put on it Right? And if let's say you did do something higher, let's say 20 grand. If they're private equity, that's a drop in the bucket.
Speaker 2:Exactly, and then?
Speaker 1:they've got your full customer list and all the information and financials.
Speaker 2:Yes.
Speaker 1:So I really I think I appreciated the fact that you know force from the trees, right. Long-term vision is like okay, do we really trust them enough with just an NDA in place to play by the rules? And, and I think that you know, sometimes people get burned even with the deposit down. So I think you know to your point even if someone was at a retirement age unless they're, like you know, sick or they need to get out ASAP, sure, even if you're closing in on that retirement age, are you still willing to risk the fact that you could be giving away?
Speaker 1:Yes, you know confidential information that could really make or break your business in the last five years before maybe you do try and sell it more Right, right, absolutely yeah, no definitely.
Speaker 1:So you know what was your perspective on perspective on you know, I guess let me back up for a second. When you guys decided that this was higher risk and there was no real earnest deposit that was going to be made, you know what was the discussion like on the back end. Did they try and negotiate more? Was it like okay, see you later? It like okay, see you later.
Speaker 2:It was a lot like see you later. We took a vote. So we like between myself, corey, my brother, my dad and my sister-in-law, we took a vote and you know I was we were all actually at a point where we were on board and then we all decided to vote no. But yeah, it was weird because we've actually been approached by this company twice. The first time we just kind of stopped, we talked to them, we entertained it for a short amount of time and then they reached out to us in like the fall slash, winter, so it was like springtime thing. And then later in the year and my father actually is the one that sent an email saying you know these things, and we requested certain things be taken out of the contract or, you know, be reworded or whatever, and they wouldn't do it and so we were just like all right, well, we're, you know, we're not interested. And then never heard from him again.
Speaker 1:Well, can't ever say never, right? There's always the chance they come back a third time and they're like, okay, we're ready to deal.
Speaker 2:I mean, I was actually just speaking to my dad about it this weekend. He's like I was going over the questions that you had sent me and he's like that one just put should have done it. I'm like we still joke about it.
Speaker 1:Well, I like how democratic your process was internally.
Speaker 2:I appreciate that.
Speaker 1:Um, and also the fact that you guys went the democratic voting approach even though, um, there's four votes right, so you could have had a huge, huge that was a definite possibility, and then it could have had a really big strife.
Speaker 1:Um, so I, and also I guess I wanted to say you know, I, I don't think I knew that you guys had had a previous conversation with them. So when they came around the second time was was there more or less? Uh, I don't want to call it skepticism, but like was the second time they came around like, oh good, maybe they'll come to us with better terms.
Speaker 2:We entertained it more the second time. For sure, and don't get me wrong, I mean there were a lot of really good things to what they were offering. It's just the instability, the insecurity in it of are we going to you know? Is this going to actually go through this way? Will they walk away? It was just the, the unknowing of it all. Um so, yeah, it wasn't. We didn't go super in depth the first time around.
Speaker 1:Well, and I was going to say too, for anybody that I mean okay, think about it this way, your financials tell a story right, your financials tell a story right.
Speaker 1:And so this incessant need by buyers to get client lists to me which is a constant thing, it's a constant battle between the two parties is always surprising to me, because if you're good at looking at financials, you can pretty safely say, okay, this has reliability, this has dependability, this has reliability, this has dependability, this has year over year growth.
Speaker 1:And you know, in a lot of cases when I am representing sellers, I always tell them do a redacted list. You don't have to, you know you can still give them figures and you know I don't want to call it, like you know, truly redacted, because you could have like code names and stuff, but at least you could give them a big picture to determine, because I think a lot of times, some of it is that they, when their you know intentions are good, I think they want to see client concentration right and so one way to overcome that is to say well, we'll give you a redacted list, we'll give you the full list at closing, but the redacted list will give you a good picture to show how many clients are making up the bulk of our revenue yep and in, and then if they don't like that, that's where the real red flag to me comes up and I believe that we did that's.
Speaker 2:What we submitted initially was a redacted list, and I think it was. I mean, I just think we were so close to going through with it and that was at the closing that they, they wanted to have a whole customer list and everything, and that's when they could they could literally potentially walk away like in the process of selling it. It's just, it's I don't know. It's a fine line, it truly is it truly is well.
Speaker 1:So we were having a conversation about before this episode started recording, about how you know you guys have really a great coverage over the East Valley and that you sometimes see other pest control companies come in and try and poach your customers. You know, tell us and feel free to. You know, quote unquote, toot your own horn here because, no, I think it's important.
Speaker 1:I think when people are thinking about starting businesses for the first time, right there's there's kind of the the listener who's thinking about going into a trades-based business because I think a lot of what you have to share applies across many different industries but also somebody who's in this business, who's wanting to grow and evolve and eventually get to a place where a buyer could be interested. You know how have you guys built something that you know? When someone comes knocking on a customer's door, they're like oh no, we're covered.
Speaker 2:We we have bug off pest control Right. Um, I think that consistency is huge. Um, people are used to, you know I've got customers that are used to seeing me every month or however often. Um, you know, doing the same consistent work every time. Talking about you know, always asking you know what issues they're experiencing since the last visit.
Speaker 1:Um, I was going to say just based off of our conversations, I think there's a personal level to what you have going on yes. And I don't want to blanket statement this, but I think anybody who runs a family-owned and operated business they have way more invested and they treat their clients or customers with just a different level of care. Yes, because it's personal?
Speaker 2:Yeah, absolutely, and I personal relationships with customers. Um, I mean, I personally I'm good at remembering things. I'll. You know how's your daughter doing, how's your? You know, I always greet the dogs and cats, and reputation is huge, you know you, if you screw up once, then that's going to travel, and so you know, just trying to make sure that you always do your best, best job and keep with the consistency. One thing that I find with customers that switch over to our company versus like a big company, is that every time somebody shows up it's a different technician. They have to go over everything all over again, explain what they want done, what they don't want done. So that's one thing that I think is really valuable to people is that having the familiar face.
Speaker 1:Oh, absolutely no, and I was going to say the remembering of personal facts is huge. It's huge because, to you know and this applies across even service based industries or or, um, you know, knowledge-based industries like my own, you know being able to get on the phone and and know personal things about the client, so that they don't have to re-explain, like you said, or or just feel like they don't have to worry that you're coming from a place of like no knowledge or that you're missing those gaps right, yes, yes.
Speaker 1:So I really think that that is a huge factor. But I was going to say too, you know and I don't know, you mentioned in passing, you know, educating the client, educating the client, and I can imagine that 13 years in pest control lends a special knowledge base really to like how to approach certain situations. Yes, and not all pest control is like I think sometimes people simplify they trade especially pest control, like definitely it's just one one and done right, yeah, no, there's.
Speaker 2:I mean you ants. You know you have to treat things differently. And then one thing that I've noticed with um, some of the bigger companies, that they feed on the fear of, um, individuals. So you know they I've had people that call us for a second opinion, where they're told they have termites or um, you know that it's a big area for scorpions, and so people freak out, they think, oh my gosh, I'm on a scorpion nest, which isn't necessarily a thing. But, um, you know, that's just something. I I always try to calm people down a little bit, you know I I try to make them not as nervous about things, because people move from Midwest and they've never dealt with scorpions before, and then they come out here and they think that you know, scorpion sting is an automatic hospital visit and all these different things.
Speaker 2:and so I try to educate people on good things, bad things, you know things to look out for things like that well, and I think that makes a huge difference, even in specifically like insects because, people don't like insects inherently, so having comfort and peace of mind that what's been done to the house or the property is going to make a difference, Absolutely.
Speaker 1:I think also adds to that layer. So, going back to something that you had said earlier in our conversation about how you know, you and your brother, corey, are not at the retirement age no retirement age and um. So when you were thinking about selling, you know, from just a thoughts and planning perspective, you know what was the vision if you were going to accept that offer.
Speaker 2:Well, we were. I think that the plan was that my brother and I would stay on and work with them and, um, it was like, like I said, it was like this evergreen thing where you know they, they would pay us the same, the same wage, and all these different things. Like I can't remember verbatim what the contract said. Um, but my plan was to move away. You can go do something else. Um, I, you know, cause in the contract there was things that said that you could. You know there's non-competes and different things like that, and so I was going to step away from the uh, the pest industry.
Speaker 2:But my brother that was the biggest thing, him having a family, he's got two little kids Um, it was a lot scarier for that situation. Like you know, he's been doing pest control for so long that it would be hard to step away from something that's been essentially his career. So we didn't really get too too far into what our plans were going to be. But now we've at least realized, like a sales threshold that we'd like to get to, where you know we'd be more apt to go further with a potential buyer, if that makes sense. Yeah.
Speaker 1:Okay, Well no, and I think too. I actually think it would benefit a potential transaction down the road from someone going through this offer and then deciding to walk away, whether it's based on the fact that the deal terms aren't a good fit, or whether the timing isn't right, or whatever it may be.
Speaker 2:Yes.
Speaker 1:Only because it gives you guys the foresight now, based on your experience, of what you didn't like, what's a go, no go for you, and also it made everyone kind of pause and think, okay, what do I want? Because staying on board was an option, but it wasn't mandatory.
Speaker 2:No, no, and I mean the walking away thing probably would have been the best for, I think, all of us just, I mean, you get to, you get to a point where you you feel that burnout, Um. But I do think it kind of reignited things in us a little bit more. It's like, okay, we need to. You know, this is what we need to do and this is, you know, in the future, if something like this happens again, we, we know what to do as far as getting legal advice and all of that, um. But yeah, I think it kind of lit a fire under our butts a little bit so is now the vision to grow and expand, or is it more?
Speaker 1:because I feel like you could go through this process and it could put a magnifying glass on the things that aren't great. And you go back and you say, okay, now I know where we want to work on, process or marketing or some of these things that, like, we just feel like could be better. But also, if you look at it from a different lens right, less the magnifying glass and more like, oh my God, we actually have something great. Let's do this even 10 times more. Yes, so, like, tell me what was the thought process? Like post, like rejection of the offer?
Speaker 2:We are at this point. We definitely are teetering the line of needed needing to add at least one more technician. Um, we're, you know we're doing a lot for cause currently there's there's like three employees there's my sister-in-law who does the phones, and then there's my brother and myself and we do all the work out in the field, and it's a lot for two people. I mean, this time of year, april to October, it's like, don't even talk to me. Um, we work a lot of Saturdays. Um, so we we're on the verge of hiring somebody, but that comes with its own you know thing where you got to find somebody that's trustworthy and has good work ethic and all of that. Um, so yeah, I think that's the goal is to bring somebody else on, maybe branch out further. Um, we've talked about Tucson. Um, my parents just moved there and their pest control person has there's. They've still got a lot of bugs.
Speaker 1:I'm like you guys need a good one out here.
Speaker 2:So ultimately, I think that's what we'd like to do. We want to keep it small, but maybe add like a technician or two, and then see what happens with that.
Speaker 1:It's interesting to hear and obviously having your mom and dad in Tucson makes Tucson like an easy thought process.
Speaker 1:But I think it's interesting to always hear you know and this is my perspective as well is that there are so many pockets of Arizona outside of the metropolitan Phoenix area that need really good help in various industries, and because they're on the fringe or they're kind of out on an island, because there's not much around them, they just really struggle to get that same level of service or expertise. And so, um, I think it's funny that you mentioned, like you know, tucson. Your mom and dad moved there and they've got you know not great bug control going on and so, um, I just think it's always funny.
Speaker 1:Um, I guess my brain thinks a lot like your brain where, like it's, it's easy to. I think in a family owned and operated business, it's easy to ping ideas off each other Absolutely and to use each other as sounding boards and come up with really great ideas. That maybe and I don't want to say this wholesale, because obviously there's great employees that brainstorm together and come up with ideas but I think there's so much more invested when it's your own. You know parents, your own sisters or your you know, you know someone related to you by marriage or blood that, like you all have skin in the game and so, like your, your thought processes. How can we all better each other?
Speaker 2:I think that's yes definitely no.
Speaker 1:I think it's cool. So you know, did you ever see yourself getting into the pest control business?
Speaker 2:I don't think I would have if it wasn't a family thing. I really, I went to um I I went to culinary school and graduated from that and I worked on a cruise ship and did some stuff in that industry and when I was I think I was 23, I was like I want to do something completely different and so I just, yeah, the rest is history, I guess. Yeah.
Speaker 1:You're, you're committed now. Yeah.
Speaker 2:It's a trap.
Speaker 1:Well, so if you guys decided at some point in the future to sell um, do you think you would be more apt to work with a corporate buyer based on your experience, or do you think you would be more weary and looking for someone that, like you said, could preserve your legacy in a more meaningful manner?
Speaker 2:if we could find somebody that you know has a family that wants to potentially do that, take over a business like ours, I think that that would be like awesome. But you know it's, I don't know. You know it's like a monetary thing too, cause it's, you know, money's not everything. But when you put your blood, sweat and tears into something like you want to, you want to get rewarded um, equally. So I don't know, I guess it would just really depend. It would really depend.
Speaker 1:I think it's interesting to hear the dichotomy of what you're saying, which is the balance between getting getting the right offer monetarily but also having this pain in the back that says like the best monetary offer may not preserve the legacy yeah, and so I think that's fascinating to hear because I think, just from my experience, when going through the deal right, everybody is go, go, go.
Speaker 2:And.
Speaker 1:I think that, unfortunately, that go go go mentality blinds a lot of people to their really deep down wishes of what's more important, right, and how do we find the balance between the two? But I mean, like you said, you're not at the retirement age and so this conversation is entirely different for you guys.
Speaker 2:Yes, maybe in 30 years or whatever it may be. I do think that if circumstances were different, it would have been a good deal. It's just it's. There's just too much of the unknown. Like I had said, like it's just, it was too much of a gamble.
Speaker 1:It really was so switching gears from the idea of selling to a third party. Do you think there's ever a reality in which Corey's kids grow up and work in the business? Is that a conversation that's been had over the?
Speaker 2:day, I always joke that my oldest nephew is 10 years away from being 18 and he would be perfect. But um, I don't know. They'll probably want to go to college and you know do their own thing, yeah yeah, um, they keep saying they want to be landscapers. I'm like why don't you just do pest control? It's just as miserable.
Speaker 1:But we'll see. Yeah, you're still outside in the middle of summer yeah, yes that's funny. Um, yeah, well, I, just I. It's right now, you know, and obviously this can change because the kids, like you know, 10 year old right now, but like kids nowadays, they're so far from being in a position to really potentially even make the decision to be in a um type situation. Right, and obviously they could work in the family business a lot earlier, right, you know 15, 16 and get like a feel for it.
Speaker 2:Absolutely.
Speaker 1:But right now we're seeing in the market that so many kids don't want to take over mom and dad's business and it is industry agnostic. It's not because it's hard, it's not because it's you know all outdoor trades. It's not. You know the accounting practices because you know math. Is you know? Do you really want to be an accountant?
Speaker 1:Right, like there's scheduling and all the stuff that's complicated. It's really just this widespread. Nobody wants to take over the family business and I'll be really curious to see whether that kind of shifts yeah, yeah, that idea changes.
Speaker 2:I ask kids now what they want to be and they just say famous.
Speaker 1:I'm like oh boy all right cool what about pest control? It's worse than I thought it was out there.
Speaker 1:Yeah, it's wild well, I can imagine that social media has played a pivotal role in a lot of that. Unfortunately, definitely um, the. The crazy part to me in that whole conversation right the the juxtaposition of succession planning versus selling to a third party. One of the. When you do have family members that are potentially interested in it. One of the extra hurdles that I see quite frequently occur is that mom and dad want to use the business as their retirement fund. Yes, which makes sense, right, you know, and some people haven't saved in a way that they feel comfortable with, and so they really do want to cash out, kind of like holding onto a home in retirement.
Speaker 1:They want to cash out and use that Absolutely. The hard part is that cash out number which a lot of times based on evaluation it's. It's not that it's unfair, but the kids look at it and they're like I can't do this Right, I can't afford it. I'm I'm on the younger side. My credit won't get me the right loans.
Speaker 2:You know Right.
Speaker 1:And so I just it's this weird, you know I don't want to call it like give and take, but it's, you know, half the camp of like I don't want it, I want to do YouTube videos and get sponsorships and travel the world and all this ideology. And then there's the other half of I want it but I can't afford to do it. And so it's been. It's been really interesting listening to the family dynamics of like this just doesn't work for us and so we're going to sell it and that opportunity is lost, unfortunately.
Speaker 2:Yeah, yeah, I mean I think that we will probably keep running it until we are um, until we're I don't know old. We'll see what happens. But yeah, I mean, if the right offer comes around, we'll see.
Speaker 1:So, with all of this perspective and obviously internal discussions that you had because I do think that you know, having an offer come in unsolicited is a whole lot different it gives you guys so much more discussion points than if you were looking to sell and just looking for offers to come in listed.
Speaker 1:It is a whole lot different. It gives you guys so much more discussion points. Yes, then, if you were looking to sell and just looking for offers to come in because obviously you guys have then already made the collective decision that, like that's the direction you want to go um, looking, you know, looking at all that you guys have created and everything that you know you've worked on up until receiving the offer, and then working through that, you know, if someone was looking to you as like a potential mentor or someone to give advice, you know what would you tell someone that was, you know, in a successful business but maybe not quite ready to sell? And then also, what would be the advice you give to someone who's in a family-owned and operated business and has to maybe navigate this with their family members? Those are loaded questions, I know.
Speaker 2:Yeah, I actually I didn't hear what you said. I mean, I heard, but I didn't.
Speaker 1:Process. Yeah, you were deep in thought trying to come up with answers and I'm sorry I'm going off script for Amber here, that's okay, okay. Provided questions. So if you were going to um, give advice, I think as the first part, to someone who's in a similarly situated position, maybe not necessarily in your industry, but you know very similar business. You know what would be your advice to them, based on going through this experience with the unsolicited offer and negotiation and all that well, again, it'll always be talk to a lawyer, um.
Speaker 2:But you know some things, do you know? Sometimes, when things seem like they're too good to be true, they are um I like that.
Speaker 1:Okay, that's sound advice okay because I think a lot of people get the offer and they're giddy yes, and that is.
Speaker 2:That is a feeling for sure at first.
Speaker 1:I mean, you're just like the chosen one.
Speaker 2:It's like the Willy Wonka golden ticket right, you're like oh my god, somebody wants my business.
Speaker 1:Yeah, yeah and so you kind of get this. I don't want to say, uh, like you've won, like you've won a prize. And so you're a little, I feel like you get really excited, that like you have something unique and somebody wants it, and then you go through this process and it's. It's like the you know snow white apple, like it's pretty on the outside right.
Speaker 2:And I do remember, like at the end, when we decided to back out, um, I remember saying they want us but they can't have us like you know it was it? There is like a sense of flattery initially, like oh wow, like why us, but um?
Speaker 1:yeah, well, and I so. I have a client who received different industry, but they received a corporate offer and and they at first their reaction was we're selling yeah, and they didn't even know the number and I'm like hold, pump the brakes yeah let's have a conversation.
Speaker 1:I don't have to be included in it. Right, you can have non-legal conversations, like they don't have to lawyer up. You don't have to lawyer up, but let's pump the brakes. Find out what the offer actually entails. They might want some basic financial information, like they asked of you. You know, let's get the NDA in place because that's important, but ultimately there are so many times when that unsolicited offer comes in and it clouds judgment. And then the bad part is, if you weren't intending on selling, and then you decide I'm going to entertain this offer. It takes so much focus and energy away from the owners and operators who then have to, like, take time away from just daily operations to negotiate, make a decision, have powwows in the kitchen, over the dinner table, right?
Speaker 1:like yeah really have discussions about whether this is the right move or not right. And you know, 90 I don't want to say 90 of the time because it's a made-up statistic, but, like I would say a good majority of the time the offer is not what you envisioned, right right it's like a bad relationship. You're trying to fit somebody into a mold and it's not a good analogy it's not right.
Speaker 1:So you know, I think if you had to give somebody advice who was in a similarly situated position, like what would be your advice at the end of the day?
Speaker 2:um, just make sure that you stay true to what uh, you know what your idea was with the business, if you know what your goals are. Um, like I'd said, if uh, something's too good, if something seems too good to be true, then it probably it might be. You know. Think of the future for sure. Consider. You know, like, your age. Um, you know what you see as retirement, what age you'd like to retire? Um, will that be? You know what you see as retirement, what age you'd like to retire Will that be? Will you be able to accomplish that by doing this, or is this going to be something that just kind of gets you through? You know, 10 years maybe? So just make sure that it's like something that you're really sure about. Just because it's not, you know, it's a done deal once the things are signed and it's no longer yours no, absolutely, I think.
Speaker 1:to sum it up, I think for anyone listening wondering a how do I get an offer? I think in most cases, if you're in the right industry and you're a complimentary business to, to a corporate buyer, at least you might get unsolicited offers. And then when you get that unsolicited offer, you then have to go into decision-making mode and I think that you know resonates with everything you've said today on this show that you know it has to be a well thought out decision. You know I liked that you guys had the vote.
Speaker 1:I really do I like that idea? I just think there are so many family owned and operated businesses that I've seen where they're. The dynamic of power is so shifted, and so this idea that you guys all came together and collectively decided on what was right and and also with four votes, decided unanimously to agree, I think speaks volumes to to the dynamics of your family owned and operated business I think my mom would have been the tiebreaker she's a good neutral. She's a good neutral. Yes, well, thank you so much, thank you.
Speaker 1:It's been really it's been very interesting and fun yeah, no, I I loved speaking with you and you know, um, I think this really gets a good lens on what this looks like. Potentially because it's not exactly a true transaction, because it was an offer and an offer that was turned down, and so I think not many people have the gumption or the foresight to say hold the phone. This isn't right for me yeah and I. I give you guys a lot of credit for being able to do that with money on the line.
Speaker 2:Thank you, and you were a big help to us too, so if not for you, we might have sold, and who knows what would have happened.
Speaker 1:no, I appreciate that very much, so I think anybody who's listening. I think the take takeaway message is there may be times in your business where you are offered like the show, deal or deal and you have to make the decision that is right for you in your heart, not necessarily what's on the dollar sign, and sometimes no deal is the right decision. Thanks again, amber, for being on the show.
Speaker 2:Thanks for having me.
Speaker 1:Please like, comment or share the podcast. I'm always open to having discussions. Stay tuned for next episode. In the world of business, not all deals are what they seem. Stay tuned for next episode. Welcome to Mergers. She Wrote where we examine strategies and stories behind the biggest deals in business, because in M&A, the real risks are the ones you don't take.