Editor’s Note:
Dr. Rick Franza, is the Dean of the Hull College of Business who discusses a different, timely business topic each Monday in this column. This week, we’re looking at the sale of CSRA businesses. The interview has been edited for clarity and impact.
ABD: Rick, in the last few years and months a number of high-profile CSRA companies have sold their businesses. TaxSlayer, Club Car, Rec-Teq and most recently, Southern Industries (Southern Siding). What are the owners thinking about?
Rick: It really comes down to control, money for themselves, a cash infusion for their companies and family interests.
ABD: How so?
Rick: Sometimes companies get an offer they just can’t refuse, even if the business wasn’t on the market. In the cases of TaxSlayer, Club Car and Rec-Teq, a private equity firm was involved. Do you want to give up some or all of the control? It depends on your perspective. If you invested sweat equity and emotional energy, it may be hard to give up “your baby.” You just don’t know what they’ll (private equity partners) do.
ABD: In the case of Southern Industries, the President Jim Felton was in negotiations with a private equity firm in Florida and never did pull the trigger. He sold the business to family and a long-time, key employee.
Rick: That goes back to emotional energy. For anyone in the CSRA who starts a business or has a long-tenured family business, there are a lot of factors. Do you have people in the next generation who want to continue running the company? If you don’t, you run the risk that if another firm buys the business, they have to determine whether to keep your current team.
