SCOTTSDALE, Ariz. – Just a little more than years ago, Wareco Service Inc. was a model for success in petroleum distribution and retailing. The Jacksonville, Ill. company boasted 125 retail locations throughout the Midwest and in Florida, and provided a living for as many as 10 members of the Ware family.
Today, it is gone.
Save a handful of less-than-quality retail sites and some office equipment, the third-generation business no longer exists, having been acquired by Speedway SuperAmerica and Clark Retail Marketing in separate deals that split the company’s Florida and Midwest operations and eliminated the Wareco Inc. name.
For former Wareco Chief Executive Officer Jon Ware (pictured, background) and his son Brad (pictured, foreground), selling the family business was a logical decision, but far from an easy one, the two told attendees at the Petroleum Marketers Association of America’s Motor Fuels & Lubes Conference Friday. In a session the challenges of selling a family –owned business, Jon and Brad Ware discussed both the professional and personal aspects of letting go of a third-generation family business.
“It can be emotionally difficult,” said Brad Ware, who has since taken a position with the Illinois Petroleum Marketers Association. “You have to make certain you are doing it for the right reasons.”
According to the father and son, the company was first approached by SSA to sell its Florida stores about three years ago, and about a year later by Clark, which was interested in acquiring its Midwest units. “I’ll tell you this, we were not for sale,” Jon Ware said, recalling the company’s mindset at the time. “Then they made us an offer and we said, ‘well, maybe we are for sale. Then we began to look around, and we thought, “we’re not getting any younger; maybe it is time to get out.’”
The company was also facing a potentially dicey management decision: With so many family members – including 3rd-generation members of the management team – involved in the day-to-day business, it would be difficult to eventually choose a successor to be chief executive. “We had seven people who could have been CEO,” Jon Ware said.
Once the family took a vote and -- in a split decision -- decided to sell, it faced the daunting task of organizing necessary documentation on assets that, in many cases, had been acquired in the 1930s. “We had sites that had been acquired in handshake deals by my dad,” Jon Ware said. “We had to do a lot of digging to get documentation.”
Even more challenging was doing the legwork on the sly. Once the decision to sell was made, the family agreed it would not share the decision with its employees until the deal was completed. “There was concern that some employees might not be happy about it, or that some might mentally ‘check out’ of the job ahead of time,” Brad Ware said.
Nonetheless, both agreed the single most difficult aspect of the sale was letting go of their employees. “We were a bit unusual in that we had employees who had been with us 30 or 40 years,” Jon Ware said. “We felt like they were part of our family, too. When the agreed to sell, we spend a great deal of time making sure that our employees would be taken care of.”
All said, the sale to Clark took Wareco nearly two years to complete – largely because the company had not been prepared to sell. The father and son told attendees their most important piece of advice is to be prepared. Given the current business climate and the number of mergers and acquisition taking place in the industry, the right deal could come along at any time.
“Get ready,” John Ware said. “Get your documentation in order, do any site surveys that need doing and have all of your records organized – even if you have no plan to sell right now. If the right deal does come along, you can close it quickly and confidentially. What do you think employees start wondering when all of a sudden you are doing site surveys at four or five locations? The rumors will start.”
And sell only for the right reasons. While selling a family business is an emotional decision, do not make it an emotional decision. “If you are just feeling fed up with the business, that might not be the best time to make the decision to sell,” Brad Ware said. “If you do it, make sure you do it for the right reasons.”
