An Early Acquisition – John and A Drinks Business

Hi there. I wanted to tell you a story about one of my earlier acquisitions. 

It was in the drinks industry and we had a business importing drink products which were mainly alcoholic products. 

We also had a joint venture with the Greenalls Group.

Our business was booming, selling to major hotels and clubs. We also began some brand marketing because various companies were approaching us to help them gain listings in key on-trade outlets.

I was very busy and I had a great team.

We exceeded £1,000,000 turnover and were fast approaching £2 million.

One particular occasion our accountants told me that one of our customers, a smaller wholesaler, was having problems paying and I knew the guy well, so I gave him a call. I’ll refer to him as John for now.

He was really stressed out. He’d started the business. I’d known him for years and was very friendly with him. And he was struggling. His customers weren’t paying him. He wasn’t able to pay us.

We agreed to meet and sat down with a beer. I knew that John had a family with young kids, and he actually became very emotional at the meeting and was very upset that his business was looking like it was about to fail.

I had a lot of sympathy for him, but he’d taken some high-value products from us and we needed payment.

John said that his house was on the line. He’d refinanced his house and re-mortgaged it, so he and his family were in danger of being repossessed if he couldn’t carry on paying the mortgage. If the business didn’t make the money, then he couldn’t pay the mortgage.

This meeting really affected me because I’ve always believed in trying to do win-win deals. I felt a great deal of sympathy with John, as I also had young kids at that time, so it made me feel really bad.

I went home, spoke with my wife and with some of my team and really didn’t want to be part of ruining this guy’s life.

So we decided we could offer him help by absorbing his business into mine, and then employ him as a sales manager with a good salary.

The following week I sat down with him, this time with no beer, just a coffee!  I talked through the offer to him, which also gave him share options so that he could benefit from the increase in turnover and profitability of the business.

John continued with us for some time. Things went really well and turnover increased. Eventually, that business was sold for a 7-figure sum.

John received good compensation for his share options and of course his salary. So he and his family were very grateful as It saved John from bankruptcy and losing his home. We had reached a win-win solution. 

The business benefited because John had some great contacts in the trade. 

He, just like many people, wasn’t terribly good with finances. He was a bit dis-organised, however, he was a really good salesman.

And that was how we resolved a bad situation and came up with a win-win solution.

So the moral here is that creative restructuring of businesses is sometimes necessary, and can bring benefits all round …that’s why we use these techniques to great effect for our clients/colleagues in Acquisition Assist.

If you want to see how we can help you, click the link below to book a clarity call with me! 

Cheers 

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