MISSISSAUGA, Ont. — On Oct. 23, 2012, Wheels Group announced it had acquired MSM Transportation in a blockbuster deal worth $18.6 million.
The announcement came as a surprise, in part because Mike McCarron, managing partner and the public face of MSM Transportation was just 52 years of age – seemingly too young to be considering retirement.
What was the reason for the sale? Why was the timing significant? And what was learned along the way about the arduous process of selling an established business? For the answers to these questions and more, we caught up with McCarron for an exclusive interview.
When we spoke to McCarron, he had just assumed a new position working in mergers and acquisitions with Wheels Group (a role he was mindful not to discuss with Wheels until after the sale of MSM had been finalized).
Over the course of the next week, Trucknews.com will be running the seven-part interview. The interview will also appear in the January issues of Truck News and Truck West magazines. You can also check out the November-December issue of Motortruck Fleet Executive to catch McCarron’s regular column, in which he writes about his reasons for selling the business.
For now, enjoy Part 2 of executive editor James Menzies’ wide-ranging discussion with McCarron:
Part 1: Why he sold his business
Part 2: Finding the right fit
TN: How did you identify Wheels Group as a good fit?
McCarron: Wheels and MSM have a long history together. We were two of the first transportation companies to become one of the 50 Best Managed Companies about 17 years ago. We were both major customers of the same software company, so we worked a lot with them developing programs over the years.
We’ve done a lot of business over the years. And chairman and CEO Doug Tozer is not only a neighbour of mine, but we grew up in the same neighbourhood, so he’s been a good community friend for over 30 years.
TN: Did having that pre-existing relationship make the process any easier, or perhaps even more difficult?
McCarron: How this all started was, I was having coffee – something I almost never do – with a friend at the local coffee shop and Doug happened to walk by at 10 on a Saturday morning. He said ‘Mike, can you give me a call after your coffee?’ I gave him a call as soon as I got in the car and spent the next two hours driving around, talking to him on the phone.
Because of my relationship with Doug, I didn’t get actively involved in the negotiations until near the end, because I really felt it was best to stay out of it. It became evident pretty early on that there were a lot of cultural similarities, a lot of synergies from the standpoint of, we had skills and expertise they didn’t have and conversely, they had some we didn’t have. They had just turned public in what was a third-party consolidation platform and it was just a really good fit.
It was almost like buying a house. Once you find an area you like, when you’re looking at houses and the right one is there, you know it’s the right one and you buy it. I knew early in the process that Wheels was a good fit and the challenge was to work out a deal that would work for Doug and the shareholders of the company and satisfy some of the requirements Bob and myself had. It was still a very long process. It took almost nine months.
TN: Does having a partner in the business complicate the sales process, or were your objectives always aligned?
McCarron: My partner and myself, about three years ago, had some disagreements on the way the business direction should go at MSM. But, it was a respectful disagreement.
When business went bad, it needed the type of leadership Bob could bring. He ran the ship on a daily basis. We didn’t necessarily agree on the long-term direction of the company, but we were not foolish enough to do it in public or allow it to affect our ability to run the business. I was proud of the way we handled things. I think with a lot of partnerships, egos would’ve gotten involved.
James, we met each other 22 years ago and didn’t know each other well at all, and due to circumstances we ended up becoming partners. A 22-year run was a good run. The fact we disagreed on a few things didn’t make it a failure; it was a success.
When it came time to sell the business, Bob was in charge of that process. I had a lot of say, because we were both majority shareholders. We were both in tune with where we wanted to take this thing, we worked hard to get the business ready to sell and we both agreed a strategic partner was going to bring us the best return.
– In Part 3 of this interview, Mike takes us inside the boardroom for a peek at how the deal was constructed