What has changed in the industry to make this a crossroad to explore taking on an investor or exiting your business?
Produce companies have traditionally been somewhat illiquid due to limited suitors. Today, there is significant interest from financial investors like Private Equity Groups, Family Offices, etc. This financial focus combined with many strategic buyers’ strong desire to grow via acquisition has created a perfect opportunity for maximizing the value for what you have built.
This space has gotten lots of attention lately … what should an owner look for in choosing the right advisor for exploring this opportunity?
In a word — experience.
More specifically, the right experience!
There are many people and firms focused on certain components, but relatively few have the full solution that includes best management practices, strategic planning, financial and deal making expertise combined with vast knowledge of the fresh produce industry. The fresh produce industry is tight knit and confidentiality of information is critical. Finding the right trusted advisors is the key to success in this process.
How did you get the idea for this joint venture?
We have been in the industry for most of our careers and have always had a strong mutual respect for each other. Julie was helping companies improve their strategy for profitable growth and, I was helping companies take on an investor or sell their business. We came up with the idea that if you combined what Julie and I were doing, it could provide a 1+1=3 solution for business owners in our industry.
How would a business owner begin the process of exploring the option of selling part or all of their business?
The first step begins with reaching out to either one of us. It’s a consultative process to help you understand the realistic options that would make the most sense for your particular business. This may include doing nothing, but at least you make a conscious decision to do nothing. If you decide a particular option is right for you, then we develop a road map on how to get there and how to maximize your value proposition.
What about owners who are wondering about the future but need help making their decision?
We’ve designed a proprietary process called The Stress Test that we use to laser in on the strengths of the business, areas of improvement, and a preliminary look at valuation. We visit the company on site for a full day analysis – report card and assessment of whether we’re the right solution for the owner.
Many business owners long-term strategy is one of succession planning, is this still a good strategy?
Succession can be a strategy for some family businesses. In the past, most produce companies provided great lifestyles but did not have much market value. They were fairly easy to pass down from generation to generation. Today, many of these companies are quite valuable, and it takes calculated legal, financial and tax preparations to make it happen. It’s a complicated endeavor, and still doesn’t address the question: Is it the right decision from a leadership perspective?”
Finally, in this first part of the series, what relevant experience do the two of you bring to the industry and to your clients?
Julie — I began my career in a Fortune 10 energy company eventually rising to a Vice President position. My experience includes planning, strategy and membership on the mergers and acquisitions team - from sitting at the negotiating table through the integration after closing. After 15 years in the publicly traded arena, I launched Krivanek Consulting, now in its 28th year specializing in the produce industry. I’ve created strategy plans and strengthened the management processes and for over a dozen global businesses that went on to sell and start new growth paths for the future.
Steve — Of my 44 year career in the fresh food industry, the last 28 years were spent in C-suite positions. Much of that time identifying, negotiating, closing, and successfully integrating several dozen acquisitions of privately held fresh food companies. For the last several years, I have been very involved in the Private Equity, Family Office and Investment Banking arena and have developed strong relationships with many investment groups as well as excellent relationships with many potential strategic suitors.
In 2017, Julie Krivanek of Krivanek Consulting Inc. in Denver and Steve Grinstead of The Grinstead Group in Dallas partnered to help owners looking to sell their businesses.
This is part one of four in a series of stories for produce businesses and their business partners, written by Krivanek and Grinstead.