Randall & Payne , experts in providing business advice and practical accounting solutions , also emphasised the need to be prepared when looking to sell . When speaking about the topic of valuing a business , Ollie said : “ Recognising all the factors that have an impact on business is key to achieving the maximum valuation in a business sale process . An experienced advisor in the sector can use detailed knowledge of the industry to obtain best value by understanding buyer motivations , valuation methodology and the impact of seasonality . These points often have a significant bearing on obtaining the best final proceeds . In the oil distribution sector , it is critical that a seller does not underestimate the value of some non-financial aspects of the business – preparation is key in this respect .
A perfect fit Following the theme of complementary , ‘ perfect ’ fits , in May this year , DTN announced the acquisition of Online Fuels .
Telling us more about why Online Fuels was such a great fit for the company , Doug Bennett , chief product officer , DTN , said : “ As a data , analytics and technology company , DTN delivers operational intelligence to organisations with complex supply chains around the world . We are committed to breaking through the noise and providing relevant , independent and actionable intelligence customers can depend on to drive confident decision-making to improve their bottom line and reduce risk .
“ Online Fuels is the leader in digital transformation solutions for the downstream refined fuels market . The deal enables DTN to connect the buyers and sellers of commodities worldwide through a seamless , transparent and efficient online trading platform .”
Speaking about the sale to DTN , James Stairmand , former CEO of Online Fuels , said : “ The plan was always to create technology that helped deliver digital transformation to downstream fuel businesses . DTN is a leading provider of operational intelligence solutions to global refined fuels , agriculture , and other weather-sensitive industries and they currently manage more than 85 % of the North American supply chain pricing and billing , making them a perfect fit for our industry-leading technology . With their broad range of customers across industries , Online Fuels ’ technology will be used to increase support for customers ’ efficient and transparent transactions , ultimately improving business outcomes .”
Family ties When it comes to family businesses , there are a number of reasons why companies may buy or sell . Acquiring businesses or divisions is a great way to grow an independent business , whereas selling could be the result of succession planning , or a lack thereof .
Reflecting on past mergers and acquisitions , Carrie Marsh , managing director , Marsh Fuels said : “ We merged with another fuel business in town many years ago with my Grandfather at the helm , at one point becoming Brain & Marsh in Newbury before transforming into Marsh Fuels . As for now ? We are happy as we are .”
When asked if Carrie had ever considered selling , she said : “ At 120 years old next year , we ’ re here to stay for a while yet . I see our business staying within our family and come the day that regulation and Government environmental changes see us heading for the pastures , then perhaps that may be the time to retire and enjoy a winter without worrying about getting the tankers about on the road !”
While some businesses have succession plans in place and every intention of keeping it within the family , this is not always possible for others . Mark Nolan , Nolan Oils “ I ’ d love to expand but it ’ s a challenge to find the right person to run a third depot with the industry not as attractive to come into as it once was . I can understand why others I know have sold up . Some have no-one to hand it down to , others see buying groups constantly eroding the profit margins and many youngsters perceive it as smelly and dirty industry which reduces new talent coming into it …”
“ I would love to hand over to the family but that ’ s not on the cards , maybe a buyout but I still enjoy helping customers who have been loyal to us for 40 years plus ! We tried diversification but it can take your eye off the ball so we sold off Events and Marquees to concentrate on the core business of keeping our customers happy !”
Ollie Newbold touched upon Randall & Payne ’ s experience of working with family businesses : “ Having sold two highly respected distributors to two distinct buyer types ( one buyer being a family business , the other being a plc ), we have knowledge of overcoming the challenges this evolving industry brings .
“ In addition to detailed transaction knowledge and experience , our corporate finance team worked with a distributor for a number of years to deliver seismic change within their business , including financing a depot design and build project , eventually realising their dream to exit the business . Our established knowledge of the business enabled us to find the right buyer to ensure that the family ethos of the firm continued . In addition to this , we are increasingly engaged to provide indicative valuations and advice as to how to maximise value in the sector .”
The future of the market It is no surprise in an evolving industry that the medium- and long-term landscape may affect , whether positively or negatively , the acquisition market , as Ollie Newbold concludes : “ In the medium term , consideration needs to be given to the impact of future fuels on the independent distributor . These inevitable changes in the future will require time and energy to embed into the business .” Ollie goes on to suggest that companies may be wondering whether now is the right time to consider a sale in order to avoid any potential future erosion of value .
Whether buying , selling , thriving or surviving , it is great to see so much activity in a sector that continues to grow stronger , even amidst global pandemics and daily challenges . We don ’ t know what the future brings and what opportunities there may be just beyond the horizon but , as ever , we look forward to always keeping you updated .
Fuel Oil News | August 2021 15