We had the pleasure of interviewing Greg Cousins, a friend who built a very successful oilfield construction services business and, ultimately, sold to a private equity-backed platform company, that was deploying a buy and build strategy. We wanted to ask Greg what it was like, from start to now, and if he had any regrets. He was kind enough to tell us about this very cool journey he and his wife have been on. It's a journey that still isn't over yet...
Divestopedia: Give us a little history on your company, how you got started, how it grew and how it became the company that you actually sold?
GC: After completing high school, I attended a technical school near my home town to study heavy duty mechanics. After working as a mechanic for a year at a heavy truck dealership, I decided to move out of the city to explore business opportunities in agriculture. I ran a custom crop spraying business and partnered with a local grain elevator to provide a liquid fertilizer and chemical application service. I needed something else to keep busy between spraying seasons, so I purchased a backhoe and gravel truck and went to work in the oilfield primarily digging up line leaks and hauling gravel. Together with my wife, we offered 24 hour service, and were dedicated to answering the phone and dispatching day and night.
Our objective was to provide good service to good clients at a reasonable price and our business grew by word of mouth. As the demand for oilfield construction services increased, we expanded into more heavy equipment and tank trucks, focusing on pipeline installations, lease building, tank trucking and reclamation services.
New shops were built outside of town to accommodate the expanding line of trucks and equipment, while an office in town was purchased to house the administrative staff. The company experienced much growth in the 90’s, employing many people in the area. In 1993, we incorporated a second business, which offered diesel powered generators for rent to supply temporary power for new oilfield facilities.
We took on a lot of risk, learned from our mistakes and were fortunate to have made more good decisions than bad ones. We learned to manage through the lean times and worked lean through the better times. A lot of credit goes to our dedicated crew foremen, equipment operators, truck drivers, and mechanics who understood the value of hard work and took pride in a job well done.
Divestopedia: Why did you decide to sell the company?
GC: I could see there were a lot of opportunities that we could not take advantage of on our own. We were also at a point where the increased financial risk tied with expansion was out of our comfort level. Our hope was to find another business or investment group possessing much the same values and priorities that could help us grow our business or grow with us as partners. We were also reaching a stage in our lives where we needed a succession plan. I attended a class that focused on exit strategies for businesses which helped me better understand what an acquirer would be looking for.
Divestopedia: What was it like emotionally when you were going through the sales process?
GC: As we had already made the decision to change our ownership position, the sales process was surprisingly not that emotional for us. Our main concerns were how well we and our staff would work with the new owners after the sale. Preparing the due diligence binder and keeping the news of the prospective sale between my wife and I was challenging at times. The last month before closing was the most difficult as we were counting down the days. On the weekend when the last of the documents were signed, we had a grand celebration with our closest friends.
Divestopedia: Did you consider using a business broker? If not, why did you decide not to use one?
GC: We decided to use our long time accountant to help us through the sale process. They brought in an experienced adviser, and he worked with us and our accountants throughout the sale process.
Divestopedia: Why did you decide to partner with a private equity firm?
GC: Our decision to partner with this private equity firm was based on their previous history and reputation of putting together successful partnerships. Once we met the people behind the partnership, we were confident that their entrepreneurial spirit was a good fit for us and we felt they were honest, hardworking, successful people. We could move forward knowing that our customers could expect the same first-rate service that they had been accustomed to receiving for many years. In addition, our employees would continue to have a great place to work and we would continue to operate the same facilities in the same communities that we had in the past. Our hope was that we would learn from their experience and that our common values would help us and our staff become more successful and together we would gain a better understanding of how to grow the business.
Divestopedia: What was the integration process like once the transaction was done?
GC: Initially, there was no noticeable change for our field workers. Once we made the announcement to our staff, we simply went back to work. Over the next few months, we found the assistance of our new partners invaluable. Being able to reach out and talk about challenges and success stories with partners who had similar experiences really helped to build our relationships. The more noticeable changes were in areas of finance and accounting where we were subject to new reporting responsibilities. After six months, we moved into the company’s accounting system and there were some hiccups along the way - new software, new processes and lots of change.
Divestopedia: In hindsight, do you feel you made the right decision overall in going with private equity, given your own circumstances and what you were looking for?
GC: Our lives were focused on our business and we were at a point where we understood we needed help to continue to grow and be successful. Having partners with similar business experience and seeing the growth we’ve attained makes us confident that we made the right decision. We continue to be engaged in the direction and growth of the company and we are finding time to enjoy life as well.
Divestopedia: Finally, what is the one piece of advice you would give to guys like you who are thinking about selling their company that you wish you would have received?
GC: I'll give you three. Number one: understand the process and the terminology. Number two: understand what your priorities are. Number three: Get to know and be comfortable with the people you are considering selling to or partnering with.
Great advice indeed. Wow, we just didn't want this interview to end. There are so many ways that a sale of a business can go wrong if you don't pick the right partner. In this case, it was clear that the work Greg put in qualifying the buyer paid out in spades, as the fit worked well for him. Interestingly, Greg worked with an advisor that his accountant recommended, which shows the importance of relationships in the process. Perhaps more important than anything, though, it looks like Greg had spent considerable time preparing for the sale of his business well before it actually happened. This is ultimately the key to a successful transition.