Evaluation of a director in order to choose between an MBO or an MBI

Assignment

Evaluate three potential directors to find the owner of an LBO project        

Issues : Supporting growth, Preparing for succession
Sectors : Others
Services : Leadership Consulting

Context

  • The company is a spare parts distributor with sales of €30 million in the Mediterranean, the Middle East, Africa and Asia
  • This family-owned business had so far been managed by its elderly founding President, who has already stepped back, and by his 50-year-old son who has structured and doubled the size of the company in five years
  • It s then taken over by a majority investment fund through an LBO transaction. The family would realise a comfortable degree of added value
  • The CEO then announced that he had other career plans outside the company. Who will then be the project leader to create the expected value? The acquisition turns from an MBO to an MBI with the risk of a casting error
  • In addition to the CEO, the fund has identified a Foreign Commercial Director and a transition leader interested in this takeover

Eurosearch & Associés involvement

  • Eurosearch & Associés suggested meeting with the three potential candidates to fully assess their professional and personal project, to evaluate their skills to lead this new phase of development, and to hear their positioning on a solution as well as a backup plan
  • The modest size of the company led to conducting this evaluation with one and the same partner who was familiar with the investment fund and how it managed its investments
  • Three in-depth interviews are held with each leader

Results

  • The CEO’s upcoming career plans are not yet matured. He suggests a transition period for a year or two, allowing him time to boost his Commercial Director to replace him as CEO
  • The Commercial Director’s real abilities were evaluated. He was a key figure with a large share of the clientele but was also a performer who still needed a CEO to give him vision and impetus