We recently visited Moduflow Fan Systems in Barrow to learn more about how RfM Accountants has supported owners Ron and Beryl Whitworth to sell the family business they built together from scratch. Our video case study provides an insight into what can be done to prepare a business for future sale, attract the right buyers and achieve maximum value.
Moduflow Fan Systems – company background
Listening to Ron Whitworth talk about the design thinking behind Moduflow’s flagship fan products, it’s clear that he is hugely passionate about what has been, in effect, his life’s work. Ron has been designing industrial fans and air movement systems since 1979. As such, few people have as much knowledge of the industry or such a clear vision of how the future of air movement systems should look.
Ron launched Moduflow Fan Systems with wife Beryl in 2009. Over the last 10 years, they have worked tirelessly to grow their business and disrupt the market through a combination of innovative design and engineering precision. Ron and his experienced team now have a solid reputation for technical expertise, quality workmanship and high levels of service.
The company’s cutting-edge design and manufacturing facility is located in Barrow-in-Furness but its reach has expanded far beyond the Lake District, and Moduflow fans are now distributed all over the world.
Finding a buyer
RfM partner Paul Newsham first discussed the sale of the business with Ron and Beryl early in 2019. They had already taken steps to find a buyer through a specialist broker but the right investor had yet to come forward. Drawing on his knowledge and experience of the business sale process as well as his professional connections, Paul was able to assist with finding a buyer and completing the sale to everyone’s satisfaction.
Following the buy-out, Ron continues to support the business as Chairman, managing the transition to new ownership and ensuring Moduflow continues to be successful for many more years to come.
Below is a transcript of the video case study. Some text has been edited for brevity.
Ron: Moduflow Fan Systems design and make industrial fans that are sold all over the world. The development of Moduflow and the success we’ve had is incredible. Nobody believes how successful we’ve been in ten years.
My wife Beryl and I ran it all from our home address initially – we had some spare room that we used as offices. Beryl did the accounts – she still does – and between us it was head down, get going… And we did, and it’s been really successful.
We decided to sell the company approximately two years ago, which was quite an emotional thing to do. You do get very involved with the business. I was totally involved with it. The amount of blood, sweat and tears that I’ve personally put into it have been really high. But, as we didn’t have anyone to take it over from me, we decided to sell.
Paul: A part of my review (of the business), I met with Ron and we spoke about his aspirations for sale and what he was looking for. We then went through the process of putting a value on Ron’s business (and seeking a buyer).
In Ron’s case, it was quite easy because I knew someone who was actually interested in (buying) the type of business that Ron was involved in.
Normally what I would do to help a client to sell a business would be to speak to the client, ask them about their customers, their suppliers and the people that they know within the industry, and ask them to draw up a list of who they think may be interested in acquiring them. We then put together a confidential letter on a no-named basis and marketed the business to those people who may be interested.
Ron: When I first met Paul, he explained how to put the business on the market and how it would be sold. Paul came up with the prices that we might be expecting – which were far greater than what we would have expected – and my involvement was very minimal because Paul did all the work for me.
Paul: When you are working with family firms, you have to deal with the emotions and stress that are involved with that particular sale. I see my role as helping the client through the process; to get them to the end where they achieve their aspirations – which is to sell the business for the maximum value possible.
The key piece of advice I would give to a family business looking to sell is to look at maximising the value very early in the process. That doesn’t happen at the end – when you reach retirement age – it should probably happen a good five or six years before. At that point, you need to, in effect, plan your exit, and that’s where RfM come in…
We help the client get the business ready for sale. That could mean adopting processes, recruiting people, incentivising people with things like share option schemes… all things that need to be put in place to make the business achieve maximum value on the day of sale. Often a family business has a lot of goodwill attached to the owners and you need to move that away from the owner to the business.
We provide that personal service because we know how stressful it can be. It’s a one-off transaction and it can be very emotional because they have spent their whole life building up that business; it’s almost like a child leaving home, and we try to make that as easy as possible.
RfM Accountants is delighted to have been able to support Ron and Beryl to achieve their ambitions for the sale of their business.
“I would definitely recommend Paul and RfM to any business that was thinking of selling,” comments Ron. “It was painless from start to finish; it happened so quickly after waiting two years (with a previous broker) and getting very few enquiries. We were very impressed.”