John and Martine (Marty) Williams have always cared deeply about the people they live and work with. Their local community has returned that caring, rallying to support the longtime Cumberland, Ontario business owners after fire destroyed their home and its contents, including 13 family pets, in early 2008.
Luc Seguin's offer to buy their business wasn't the first the Williams had received after starting the process with Greg Kells at Sunbelt Business Brokers' Ottawa office. Neither was his offer the highest. But Luc's ability to “fit in” with their community of loyal customers and employees was the deciding factor when the Williams sold their John Deere dealership to him in 2009.
Their hearts told them that Luc's offer was the right one, that he would be able to carry on the positive relationships and reputation they had built over 44 years of operating JA Williams Sales and Service.
The road that brought these two parties together had twists that took even Greg, Sunbelt's president, and one of the country's most experienced brokers, by surprise.
Setting the stage
The Williams had contacted Greg based on a referral from one of their friends. A talented mechanic, John was happy in his business, but found that as the business grew, more of his time had to be spent on management not working with his hands, as he loved. At 68, he was also finding himself tired at the end of the day. Marty wanted him to sell the business while he was still healthy and able to pursue other activities, like traveling. The couple owned the property where the business was located and John's brother, Dave, was a silent partner in the business.
Greg knew he'd have no trouble selling their John Deere dealership--it was very successful, one of the top performers in its class--and he had a number of qualified entrepreneurs “jumping at the chance to run it”.
Sellers also need to be comfortable with the individuals taking over their business. This compatibility was especially important to the Williams, Greg explains. “I spent a lot of time with John and Marty and their number one concern was for all their employees to be kept on and for the business to maintain the level of service and support John's customers had come to depend on.”
Evaluating the offers
The Williams were happy with the first prospective buyers that Greg brought out to meet them. The husband, a big John Deere fan, had mechanical as well as management skills, and had the financial assets for the purchase. His wife had accounting and management skills that would also benefit the business. They made a strong team that John and Marty felt good about and the Williams accepted the couple's offer.
The purchase was not to be completed, though. The wife learned she had a serious health threat and the financial performance of the business in a tough economy proved slightly less than anticipated, adding to their uncertainty about making dramatic life changes. The couple decided not to proceed.
John and Marty also liked the next husband and wife team that Greg introduced, but they weren't as confident about this couple's ability to “fit in”. With the couple's “big company” background, the Williams felt they would have a harder time building relationships with staff and clients in their semi-rural environment.
So although the second couple's offer was excellent financially, the Williams turned it down. “They were more intent on getting the right person than the right money, ” says Greg.
Intervening events change the focus and direction
In the winter of 2008, though, the Williams had to abruptly shift their priorities to rebuilding a new home after a fire destroyed their house and all its contents. As finishing touches were being made, Luc Seguin, then parts and service manager with Belanger Auto, stopped by the Williams' to see if there was any possibility the dealership might be for sale.
“Keep in mind this whole time we were working confidentially,” Greg recounts. “'John said, 'there might be, why don't you talk to Greg Kells.'”
Buying a business was brand new territory for Luc and his wife, and Greg spent a number of evenings educating them about the process as well as exploring how they might be able to finance the purchase. The couple didn't have the means to buy the business outright, so Greg approached John's silent partner in the business, his brother, David, about staying on as a partner if they had “the right guy” to buy John's half. David said he might interested.
Greg set up more meetings and it became clear that both brothers as well as Marty thought Luc was the perfect person to take over. He had great skills in repair and service very like how JA Williams Sales and Service operated and was well liked and respected in his 20-year career with the Orleans auto dealership.
In the end, everyone achieved their goals. John and Marty accepted Luc's offer even though it was for less money than they turned down in an earlier offer. They also provided significant financing for Luc to buy their half, as they knew they were putting it in the right hands. Buyers often need sellers to take back a note for a portion of the purchase price, Greg explains. This is called “vendor take back”.
Having the Williams stay on as landlords was another workaround that helped both buyer and seller, making the purchase affordable for Luc and giving John and Marty ongoing income from the rental of the land and building.
David stayed on as a silent partner and with changes Luc has made to improve profitability, his half is worth more than before.
What wasn't known at the time was that GM was about to retire the Pontiac brand and with it, Pontiac Dealerships like Belanger's throughout Canada and the U.S., forcing changes. So things worked out as best possible for Luc and his wife, Greg recounts.
John and Marty couldn't be happier in their retirement. “Luc is doing a great job of running the place,” says John.
Free of management responsibilities, John gets to “fix“ what he loves in his own time, including the rebuilding of antique steam engines like the 8,000-pound 1898 Montmagny he hauled to Farmersville in Athens, Ontario, last year.
And Marty's dream of travel has also been realized. They've already taken three cruises, around the world, to Alaska and the Mediterranean.
By Karen Runtz