Many successful business owners build their companies from the ground up, so succession planning and settling on that right time to exit can be difficult conversations to approach.
For Cliff Nash, the decision to step aside and sell his family-owned commercial plumbing and mechanical services company came down to a personal health scare. After a battle with a stress-related illness in 2016 and 40 years in the construction business, the Florida native opted to put Nash Plumbing and Mechanical, LLC on the market.
“We had already talked about an exit plan. The hospital scare was icing on the cake,” said Nash, who quickly found a like-minded buyer in Harrisburg-based HB Global, LLC, the parent company of multiple heating, plumbing and electrical service providers, including HB McClure, IT Landes and North Shore Mechanical Contractors, LLC.
Nash Plumbing and Mechanical officially became a division of HB Global in November 2017.
Read on to learn more about the acquisition and Nash’s transition advice for owners of other plumbing and HVAC contractors who are looking to retire and sell their businesses.
Outside of the Family
Cliff Nash’s decision to sell the company outside of the Nash family wasn’t always in his succession plan. After buying out his father in 2000, Cliff Nash hoped to eventually sell the company to his son, Ryan Nash, and key company personnel.
But by 2016, the company that he helped launch in 1974 with one truck and two employees had grown to more than 150 employees and about $50 million in annual revenue.
“It had grown so large that buying me out wasn’t going to work out well. It would have cash-strapped them,” Cliff said.
That’s when he began considering a sale outside of the company. Nash wanted to find the right fit where he could realize his financial goals in retirement of buying a large tract of property for outdoor recreation, while also giving his son and the company’s employees a better long-term runway for growth.
In HB Global, he found a fast-growing employee-owned company dedicated to making strategic acquisitions and providing retirement security to its employees through an Employee Stock Ownership Plan, or ESOP.
“It was tough to sell because it was my family business,” he said. “But I saw a family-run business in HB Global that deeply cared about its employees and everything just fell together.”
For HB Global, acquiring Nash was part of the company’s long-term strategy for growth. The strategic acquisition helped to extend the company’s geographic reach outside of Pennsylvania and expand its service offerings within the commercial construction industry.
ESOP and Diversification
Under HB Global’s portfolio, Nash Plumbing and Mechanical continues to be run by the same senior leadership, led by Dave Mears and Ryan Nash. HB Global’s ESOP structure has also helped the company invest in the growth of the team, which works on a wide range of projects, from medical buildings and correctional facilities to hotels and convention centers, education facilities and high-rise office buildings in the southeastern region of the United States.
The Nash team has expanded to about 260 employees and company revenue is now pushing $70 million with projections for significant upside growth as the company has focused more of its efforts in HVAC service growth.
“Without HB Global, we wouldn’t have grown as much,” Cliff said.
As HB Global has widened its footprint through other acquisitions, including the summer 2019 acquisition of Massachusetts-based North Shore Mechanical Contractors, company stock values have continued to rise. As a result, Nash employees who stay with the company for a significant amount of time can earn considerable retirement benefits.
Since 2011, HB Global has made 19 successful acquisitions along the East Coast. Company revenue has surged from $25 million in 2010 to $218 million in 2019.
Be Part of HB Global
For Cliff Nash, the stress of continuing to manage a growing HVAC business became too much, so he aligned with a strategic partner.
His advice for other business owners: Make sure you plan out your future.
“If you are not ready to retire, you need to think about whether you want to stay involved,” he said. “I was ready to get out. I didn’t mind being around, but I didn’t want the stress level.”
Once the decision is made, he said, it’s made. “You can’t have second thoughts or regrets.”
His second tip: If you are going to sell, find a company that has similar business values.
Nash was looking for a buyer that wasn’t going to reduce the workforce to generate profits and then sell the company off again. When HB Global makes an acquisition, senior leaders commit to new employees that layoffs are not part of the growth strategy.
Are you thinking about selling your HVAC business and want financial security for your employees?
As an industry leader, HB Global is actively seeking construction-focused mechanical services companies to acquire and take to new heights. We will help you strike the right financial arrangement to help meet your retirement goals. Contact us today to learn more about our growth plans.