Outsiders Fawn over 'Family-Owned' Businesses
Leonard, Kim, Tribune-Review/Pittsburgh Tribune-Review
The letters arrive a little more often now. Unsolicited, they're from agents representing potential buyers of Quality Life Services, a family-owned chain of nursing homes and other businesses.
"We ignore them. None of us are thinking 'sell' at all," said Susie Tack Beardsley, employee relations director for the Butler- based company that her grandfather, father and uncle founded in 1973.
The future is cloudier at hundreds of other family businesses in the region, local experts say. Parents and children, siblings and spouses often have varying ideas on whether to grow the business or sell it off. And with today's robust investment climate, many are confronting more frequent bids to buy all or parts of their companies.
"There is this huge amount of money in the equity market now," said Rich Snebold, who heads the Family Business Center at NexTier Bank. Many business owners don't take time to map out the next several years, he said. "And because they've not prepared mentally, emotionally, financially, it puts inordinate pressure on them to make a decision."
One of the region's oldest family businesses was spotlighted last week, as the Henningers and McSwigans said it was time to sell Kennywood Entertainment of Pittsburgh's five parks and a banquet and catering business to a multinational amusement parks operator. After a century of ownership, more than 100 members of the families hold shares, yet none has a controlling stake and none had run daily operations at Kennywood or the other parks in decades.
Still, the families rebuffed several previous offers and called the decision tough.
"We approached them, and they initially said no to us," said Richard Golding, CEO of Parques Reunidos, the Madrid-based company that expects to acquire the Kennywood businesses in March for an undisclosed price. Later, "We came to a meeting of the minds in that we have similar philosophies, and they felt comfortable that we would be good custodians of the parks."
The Kennywood owners' choice is one example of when it's time to consider letting go of a family business, local experts who advise those companies say.
Here are others: If family members don't share the same vision for retaining and growing the business and can't resolve their differences. And if a company's ownership has passed to cousins, say, who never worked there, who collect dividends but aren't emotionally attached and are reluctant to invest in new technology and other upgrades.
"If the shareholders are ground in turmoil for too long it will affect the operation of the business," said Ann Dugan, a family business consultant and executive director of the University of Pittsburgh's Institute for Entrepreneurial Excellence. Her family runs a building supply business in Georgia that her great- grandfather started in 1890.
Family business owners face more pressure than ever -- from global competition, to the taxes and regulatory challenges that make it expensive to do business in Pennsylvania, to their own relatives who may want to jump aboard the family enterprise. …