Preparing for a Sale: How a Two-Generation Family-Owned Business Achieved a Successful Exit

By Jeb ConnorPublished On: May 15, 2023

An interview with Jeb Connor, Managing Director & Team Leader, Sale Preparation Advisory Service

When the owners of Alpha Systems—an established, family-owned document and records management services business—decided it was time to sell, they sought expertise to help determine the best exit strategy that would ensure maximum value for the family without compromising on their Company’s values. In this Q&A, we discuss how the owners prepared for a sale, which involved untethering two intertwined businesses while also ensuring that the buyers aligned with the Company’s strong culture.

Tell me about Alpha Systems and why you were interested in working with the company?

Alpha Systems started as a paper document management company that mostly served patient care institutions throughout the Mid Atlantic. It evolved to be a healthcare electronic records translation and management services SaaS business. It was people-intensive to scale, which limited the company’s growth trajectory, but it was a good business in a strong market with very satisfied A+ customers.

Alpha Systems also included AlphaLit – also an electronic records management services and SaaS business; however, it served the eDiscovery market segment with different requirements than the healthcare market. Consequently, AlphaLit needed a different IT and software infrastructure, and a different sales and marketing approach than the health care records management business; the back-end IT technology and some staff and administrative functions were common.

My first meeting with Alpha Systems included the CEO, Brett Griffith; his older brother who led healthcare sales; the CFO; the CTO; and the president of the AlphaLit business. Although their markets were new to me, our respective expertise was highly complementary, based on common values, and a good fit. We quickly agreed on next steps — a hands-on approach where I would craft, lead and guide a phased collaborative solution process, while they would approve and lead the execution of the agreed upon change strategies within the company.

What strengths stood out in the business?

It was profitable with good cash flow, no customer concentration, and highly recognizable repeat customers in spite of obvious inefficiencies and strategic challenges. There was a strong caring culture for employees and employee development across the company; values, leadership, and a commitment from the CEO to do best for the family, people and business; and acknowledgement among the CEO and CFO that they needed outside perspective, expertise and assistance.

What steps did you take to prepare for the sale?

After confirming strategic goals, leadership and I worked to prioritize projects and outcomes. Our first project was disentangling AlphaLit from Alpha Systems and addressing issues within the AlphaLit business to make it more salable. We reduced AlphaLit’s technology reliance on Alpha Systems, upgraded its customer-facing software to improve customer experience, and guided the team through the changes while motivating their leadership toward the benefits of a sale outcome. AlphaLit successfully sold – the team, family, and buyer were all pleased with the outcome and the business and people thrived after the sale.

Building on the AlphaLit sale, the family decided to sell Alpha Systems…with AlphaLit untethered from Alpha Systems, the sale readiness process was simplified. We refreshed the business model and projections and implemented organizational changes to drive cost and efficiency improvements. I worked alongside the family and leadership to prepare for the sale, helping them keep the culture of assurance, trust, and respect a priority throughout the process.

What were the results?

Both businesses successfully sold for a satisfactory up-front cash payment plus, an earnout that was achieved. And, both businesses continue to grow with many of the same operational teams and the family expressing satisfaction with the outcome, in particular the commitments made by the buyers to continue the culture and value employees – this was especially important from the beginning, as many of the employees had worked most of their careers at the company and many had children and spouses working there as well. Overall, the experience showed that regardless of the market, taking a proven, process-driven, collaborative approach worked.

Brett Griffith, formerly CEO of Alpha Systems, commented:

“Jeb’s experience, expertise and his personal and leadership style were highly effective at preparing and leading me and Alpha Systems’ leadership through the business and emotional challenges we knew nothing about but were essential to successful achieve our goals and the Company’s sale…he and the FOCUS investment bankers he introduced us to for the executing the sale process did a great job identifying buyers that were a good fit and guiding us through two successful outcomes.”

Brett Griffith, formally CEO of Alpha Systems, is now Founder and Managing Partner of the Timberidge Group, an executive management consultancy assisting small to mid-sized private companies on matters of strategy and execution.

Jeb Connor, a FOCUS Managing Director, is a proven Chairman and CEO of numerous investor-backed software, life-science technology and information technology companies. Foundational to his career are 12 years of successful sales, sales management, marketing management and general management experience with Hewlett-Packard (now Agilent Technologies) where prior to departing he was responsible for all aspects of HP’s global laboratory automation systems business. Notable among his past 30 years of founding, leading, transforming and growing investor-backed companies at the nexus of information technology and life science is are his positions as: CEO of EMAX Solution Partners where he led its turn-around from a challenged venture capital backed start-up into a successful enterprise software and e-commerce solution provider to the life-science research marketplace and its subsequent acquisition by to a public company for $149 million; Chairman & CEO of PANACYA, Inc., where he led the capitalization and transition of an innovative enterprise web infrastructure management SaaS company from R&D stage into commercial operations adequate to affect a liquidity opportunity for investors and shareholders. After singularly focusing and repositioning the company on the rapidly growing cell phone security and availability market, it was successfully sold to a public company. Founding Chairman of ArtusLabs, a records management and workflow collaboration platform honed to the special needs of biopharma and institutional life-science research labs where it was rapidly adopted, and where he was instrumental in its $30 million acquisition by a public company; Chairman of Synthematix, the life-science research market pioneer for electronic lab notebooks where Mr. Connor led its $18 million sale to a public company; Advisor to CareGain, the creator of the first and most highly regarded software analytics platform to manage health care savings plan transactions between healthcare providers, insurers, and patients where he advised the CEO in its sale to a public insurance company for $47 million; and as Founding Chairman of The Longwood Group, a boutique executive advisory consultancy that serves the Boards, CEOs and Executive teams of under-performing small-to-mid-size software, technology, and life science measurement and computation companies on matters of strategy and operational execution, capitalization, shareholder liquidity, and operational alignment and optimization. Mr. Connor has been a Senior Advisor to Focus Bankers since 2015 and serves several professional groups in varying capacities. He is a graduate of the College of Wooster, Wooster, Ohio with a BA in Biology and earned his MBA at Rutgers University. He and his wife, Denise, reside in Kennett Square, Pennsylvania.