Karim Abouzeid left his accounting job in July 2013 with the firm intention to take over a business sooner or later. He had in mind the purchase of a small or medium-sized manufacturing company, located at most three hours from Montreal. The research lasted two years.
In the firm where he worked as an auditor, there was a merger and acquisition division that fascinated him. He wanted to know more to better prepare himself.
He goes to work at Benilec to understand how a manufacturing company works. He will be the chief financial officer where he will see the workings of the organization. Even if the leaders intended to sell eventually, Karim Abouzeid knew that the bite would be too big for a first acquisition.
“I searched in the manufacturing sector. I visited 81 companies, met a lot of intermediaries, financiers and bankers, touts, but nothing seemed to work, “he recalls. Some solicitors and bankers even found him too young to embark on this adventure, he who was in his early thirties.
“I had to learn to sell myself as a buyer,” he says. Yet the statistics were in his favor, he dares, highlighting a study of the Regroupement of Young Chambers of Commerce in Quebec: nearly 75% of Quebec entrepreneurs plan to sell their businesses within five years. However, the study also notes that 60% of the next generation believes that there is a shortage of businesses to sell while 70% of executives believe there is a shortage of buyers.
Yet, despite the pitfalls, after research in entrepreneur networks, after all possible networking, the opportunity comes in a series of circumstances. A friend is in the YPO business group, he knows Denis Pichet, owner of Magnus. He is looking to sell his Magnor division specializing in the manufacture of equipment for water treatment.
The former owner becomes a minority shareholder. But Karim Abouzeid can count on a pearl in the company, a key person, André Janelle, who knows everything about the operation. Despite being close to retirement, he chose to continue to ensure a smooth transition that will last two years. The buyer takes the reins, knowing that the former owner is still there to advise him, while remaining a customer of his former business division which still houses in the same building.
The transition is made. André Janelle is still in office. “It was worth it to work without pay to find Magnor and finally embark on the recovery of the company,” admits the young businessman, who is very successful and accumulates contracts.
For him, taking over a business is worth it, even though his first year has proved complex. It’s easier than starting a business from scratch. In his opinion, too many sellers are looking for buyers in the environment they know when they do not want to give in to their competitors.
The trick for the buyer to fly, he believes, is to file a written offer and funded equivalent to 80% or 100% of the value of the company. The seller will take it seriously.