Posted: Monday 19 December 2011
As a Sunderland supporter - my Christmas came early
By Austin Flynn
There’s been much talk in the trade press lately about employee-owned businesses. The best-known examples are the likes of John Lewis, The Loch Fyne Oyster Bar and, just across the water from here in Edinburgh, Tullis Russell Papermakers in Fife. Organisations like Co+operative Development Scotland (http://www.scottish-enterprise.com/microsites/co-operative-development-scotland.aspx) exist to support the growth of co-operative enterprises in Scotland, from developing consortia to employee-buyouts. Such buyouts are now increasingly seen as an additional potential exit route for business owners.
As a Sunderland supporter of course my Christmas came early with the recent appointment of Martin O’Neill as our manager. I have little doubt that the great man will restore my club to the upper echelons of the Premier League and bring European football back to Sunderland for the first time in a generation. It was therefore whilst wearing my "football fan meets corporate lawyer" hat that a news item caught my eye last week that goes even further than the "employee-buyout" and introduces (or possibly re-introduces) the "customer-buyout": “Supporters’ Trust seals Wrexham takeover.” The fans (customers) of Wrexham Football Club loved it so much that they used their own cash to buy their football club. Those of you of my vintage and older will remember that in Christmases past, we used to have TV adverts throughout December for Remington shavers, with Victor Kiam. Mr Kiam was an American entrepreneur who claimed that he loved the shavers so much that he bought the company, after his wife bought him a Remington shaver as a present. You could say that the Wrexham supporters have "done a Victor Kiam", which could be added to the other business exit routes (traditionally involving trade sale, flotation, MBO, MBI and the like).
At my own beloved Sunderland Association Football Club, the great Niall Quinn did an "ex-employee-buyout" when he put together a consortium to buy the club in 2006, even though he hadn’t kicked a ball at The Stadium of Light since the disastrous 2002 – 2003 season. We fans will always revere him for many reasons, but one of them is that he famously (in Sunderland anyway) said “I learned my trade at Arsenal, became a footballer at Manchester City, but Sunderland got under my skin. I love Sunderland.” Far be it from me to be rude about another football club, but he clearly didn’t love Arsenal or Manchester City, and who can blame him?
So where does this love-in get us? Well, Victor Kiam loved Remington enough to buy it, The Mighty Quinn loved Sunderland AFC enough to buy it, the supporters of Wrexham Football Club loved it enough to buy it and, continuing the sporting theme, Mr Kiam also loved the New England Patriots enough to buy it too. He was clearly a man who followed his heart.
While any business acquisition is usually first and foremost a commercial decision, there are plenty of examples of other factors being taken into account. As well as falling in love with a business, people also buy for strategic reasons, to expand geographic reach, to frustrate competitors, or to exploit synergies and remove duplicated costs. Whatever your reasons for embarking on an MBO, MBI, employee-buyout, ex-employee-buyout or a "Victor Kiam", bear in mind that being in love with the business is rarely going to be a bad thing. Over the years I’ve advised on the sale and purchase of businesses across the UK, from nightclubs to foundries, betting offices to stairlift manufacturers, and in every market sector, so if you fall in love with a business and just have to have it, give me a call on 0131 247 1260 and I can help you to acquire the object of your desire.
