A Change of Exit Plans
Posted Apr 28, 2011, Published 2008-03-01
Mike Saunders always thought his son would take over Saunders Dental Laboratory, just as Mike and his two brothers had once taken the reins from their father, who founded the laboratory in 1939. Though his son opted to pursue a degree in psychology, Mike and his brothers held out hope he'd be the successor. Things looked promising when his son joined them at the laboratory after graduation. He even developed a talent for the technical work--but never a love for it.
"It became clear that he didn't want to continue in the laboratory and, by then, my brothers and I were in our late 50's, early 60's," says Saunders. He approached key employees about purchasing the Roanoke, Virginia laboratory, but they too were within a decade of retirement and not interested in taking on ownership.
Three years later, Saunders and his brothers approached a local business broker and were surprised when he provided them with six different contacts, resulting in a few legitimate offers. However, the initial prospects didn't quite sit well with Saunders: a dentist from New York City wanted to do away with the lab's traditional work and focus its production on his specialty product and a laboratory owner from a neighboring state wanted to expand the business by shipping work to China. "There was no question in my mind that laboratory work from China would be coming to the hills of Virginia, but I wasn't going to be the one to bring it here," says Saunders.
The buyer who turned out to be the right "fit" was Bill Van Evans, a Canadian laboratory owner who had also purchased laboratories in New Jersey and Florida (click here for Canadian Laboratory Owner Keeps his Eye on the Prize). Saunders and his brothers felt the price and terms were fair, a sentiment echoed by their accountant who told them, "You did the right deal at the right time with the right person." Saunders agreed to stay on for two years, and his younger brother for four years (the oldest brother had already retired).
The transition has been easy for Saunders, who says that the new owner is relatively hands-off and the daily operations haven't really changed. But he does anticipate it will be harder when it's time for him to go. "While many lab owners worry that the laboratory is too dependent on them; I sometimes worry that I'm too dependent on the laboratory," says Saunders. "I've spent 50 years of my life here. My wife says she'll believe I'm leaving when she sees it."
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