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eff Thomas is agnostic about consolidation . “ There ’ s great value in consolidation for some in our space ,” he says . “ The private equity people and venture capitalists involved in many of these deals are smart people . They know what they ’ re doing . I ’ m not saying consolidation is a good or a bad thing . I ’ m just saying that , for my company , it ’ s not right for many reasons . And until now , those reasons haven ’ t aligned with me . But that doesn ’ t mean they won ’ t tomorrow .”
Jeff is the president of Priority Dispatch . The company provides same-day , next-day , and specialized healthcare delivery services throughout the Midwest . He is a second-generation owner of the business . The company his father , Dick Thomas , founded just celebrated its 50th anniversary . From where Jeff sits , he sees continued success without needing to merge or seek a buyer soon .
“ I ’ ve been president of this company since 1999 . And I can ’ t remember a year that I haven ’ t had anywhere between three and eight private equity or venture capital firms coming in , trying to convince me of the value of either selling or consolidation . So far , this just hasn ’ t been right for our company ,” he says .
Why People Sell
The reasons others in the space are interested in selling their business are as varied as their businesses . Jeff points out four :
• Changes in the environment – “ Often people want to sell their businesses because the risk profile in their space or the business has changed ,” he comments . “ What that says to me is that , for them , it ’ s
becoming far riskier to do what they ’ ve been doing in the same way they ’ ve been doing it . Or that the risk profile is inconsistent with where they are right now .”
• Retirement – Some in the business are interested in retirement . “ I think people start to feel something like ‘ I ’ m done , and I need a way out ,’” he says . “ They ’ ve been in the business for 20 years and just want to do something else .”
• Loss of passion – “ Some have simply lost the passion for the business , and that ’ s a legitimate reason to sell a business ,” he points out .
• Need for cash – “ I think the most common reason people make this choice is that they want to get the cash to grow the business , and often that comes through an acquisition ,” says Jeff .
Over the years , Priority has grown enough organically to sustain its desired growth . Still , Jeff recalls that his dad was approached with offers to acquire the company , including substantial cash incentives . “ There were times when he entertained the option of selling , but it never quite materialized for various reasons ,” recalls Jeff . “ But in the end , he would always say that the cash incentives of selling just weren ’ t worth it to him . So it was never a great motivation for him . He felt the risk wasn ’ t worth it .”
When Jeff took over the company , he also preferred to grow it organically . “ We ’ ve been really blessed and fortunate in the footprint we ’ ve served during the 30 years I ’ ve been doing this that there has been no shortage of growth opportunities . I believe that I was paying a lot less to grow our business organically than I would be paying to go through an M & A opportunity of being acquired or acquiring other companies . I have made a few exceptions to do some strategic buys of local competitors , but those are few and far between .” summer 2023 I customized logistics & delivery Magazine 47