If you sell it, leave it. That's probably the best advice I've heard lately for company owners who sell their businesses. Family-owned businesses, which include the majority of plastics processors, are in transition. Many founder/owners seek a path toward retirement and sell the business. Some turn it over to children, who grow the business through joint ventures or sell to a larger company.
Selling the family business for any reason is tough. Ask the Noggles at SPM. As of Oct. 2, they're out of SPM, the company their father founded and in which they grew up. Still, we can't cry for Mike and Larry Noggle.
The Noggles didn't do too badly considering that 20 years ago the company did less than $1 million in sales. When they sold SPM, the owners and investors in Bace/SPM received more than $130 million.
The fact that the Noggles and Charles Finkbiner, the three top executives at SPM under Dynacast, were asked to resign over ``cultural'' differences in how the business should be structured for growth is not unusual.
Many times, former owners who try to stay on with their firm under new ownership find themselves unable to function as employees. As one person who is close to the Noggles put it, ``Mike and Larry never had to answer to anyone before, not even their dad.''
From private family firm to global public conglomerate, a stroke of the pen brings on changes that former owners often have difficulty handling. Trying to stay on as an employee, even though it is in the capacity of an operations executive, rarely works. Several consultants I've spoken with recently agreed: It's best for the former owners to take their money and walk away.
Of all people, the Noggles should know this. They've purchased other family-owned plastics companies during SPM's expansion process. Although the former owners were given the opportunity to remain on as employees, it didn't always work.
One former owner, Rod Roth, whose family founded Grant & Roth in Hillsboro, Ore., found it just didn't work for him to remain after SPM's purchase of his family's company. Roth recently started his own molding company.
Family members have many ties to the family-owned business, both financial and emotional. Walking away might seem to them like abandoning their child. Yet, once that decision is made and the deal finalized, walking away is the better part of valor.
I'm sure we haven't heard the last of the Noggles in the plastics industry. They'll chart a new course, start a new venture, begin another family-owned business, and the cycle will begin again.
Goldsberry is a Plastics News correspondent based in Phoenix.