How and why we sold our business
Andrew Hampel shares key lessons he learned after selling his business
Name: Andrew Hampel, Senior Executive in sports marketing and stadia and arena financing.
Business: International Stadia Group (ISG), London-based “market leader in forecasting and maximising revenue from seating in stadia and arenas”. Its clients include Atlético Madrid, FC Barcelona, Galatasaray, the Rugby Football Union (Twickenham) and the All England Lawn Tennis Club (Wimbledon). ISG has 12 full-time employees in London, with sales teams recruited for specific projects when required.
Background: Hampel qualified as a solicitor at leading law firm Freshfields before joining global sports, events, talent management and media company IMG (International Management Group) in 1987. After almost 19 years, having risen to a senior executive role, Hampel left to set up ISG with Ian Todd (who also worked for IMG). ISG launched in August 2006, with venture capital backing.
When and why did you sell your business?
Andrew Hampel (AH): “We sold ISG in 2016, just ten years after starting it. It was bought by Legends, a major player in the sports, entertainment and leisure industries. Ian and I owned about 75% of the business; our private equity funder owned about 12%; with family, friends and employees owning the rest. We weren’t trying to sell the business, but someone approached us. My immediate reaction was to say no thanks.”
So, why did you change your mind?
AH: “It was other people on the board, including my father and my brother-in-law, Graham, who works in private equity, who encouraged Ian and I to think more carefully about the benefits. We were the number one business in our niche in Europe, but lack of funding meant we couldn’t scale the business. We owed it to our shareholders, staff and ourselves to think about how we could best take the business forward. Selling to a much larger organisation would enable that.”
Any other reasons why you decided to sell your business?
AH: “The fact that a big sports marketing player wanted to buy us showed they were eyeing our market, and would probably soon try to enter it. Initially, we considered whether a merger would be the right strategy, but very soon it became a conversation about finding the right buyer.”
How did you find potential buyers?
AH: “Knowledge of our industry – straight away we could think of four or five potential buyers. We had conversations at board level on how to go about selling the business and whether we needed to bring in someone to manage the sale. But we were very lucky, because Graham has a lot of experience in this area and he offered to guide us through the sale. Getting him to manage the process would ensure the best outcome. We approached potential buyers, who were all interested; we just had to work out which one to go with and on what terms. Very early on, we made a list of things that were important to us, things we wanted to come out of the deal, both from a personal and business point of view.”
Was deciding to sell a difficult decision?
AH: “From a personal point of view – very difficult. When you’ve worked so hard to build something up and there’s been so much emotional investment, the thought of selling it is hard. But selling the business was always going to involve key people staying involved, not least because there would be an ‘earn-out’ deal, with payments based on future performance of the business.”
So, you didn’t want to exit the business?
AH: “I didn’t, that was never the plan – and the buyer wanted us to stay. Our industry is very people orientated; the relationships, reputation and profile we’d established were and are critical to success of the business. And I wasn’t ready to leave; I love what I do, so I wanted some commitment from a buyer that I could stay for an agreed period. I still have no plans to leave. The new owners wanted us to continue to be successful. We have a very good relationship with Legends. I’m now president of Legends EMEA and Ian is an adviser.”
What do you remember about the sales process?
AH: “It was pretty straightforward, although, obviously, there was a level of negotiation. There were a few potential buyers involved until we made up our minds about who we wanted to sell to. The new owners were and are very straightforward to deal with, so, overall it went very smoothly – although these things inevitably take longer than you think. The process took about six months. There is due diligence, but also, people are getting on with their day jobs at the same time.”
What advice do you offer to those wanting to sell their business?
AH: “Before you do anything else, ask yourself whether you have the capabilities within the business to handle the sale. Few small companies do. The process is different to anything you’ve ever done – and it’s very difficult to remain objective, because you’ve so much invested emotionally. We were very lucky to have three people on our board with extensive experience of buying and selling businesses. At the very beginning, also decide what you want out of the deal – both business and personally.”
What about timing?
AH: “Timing is crucial, too, if you’re to maximise your returns. You must sell at the right time, when your business is at its most attractive to buyers. And you’re much more likely to be successful if your business can demonstrate good governance, is efficient, well managed and administered, with good systems and processes. Buyers want to see that your business is well organised and structured. My father’s influence, having managed much larger, high-profile public companies and been involved in writing the code on corporate governance, was very valuable in that regard.”
Any other final words of advice?
AH: “Throughout the process, seek advice from experienced professionals and listen to what they say. The assistance we received from Graham was fundamental to our successful outcome. Parts of the process are complex, so you need guidance from calm, experienced professionals. And if you plan to stay involved in the business post sale, you must really understand potential buyers before making your decision. Spend time with them; understand why they want to buy your business; think about how their ownership will affect how the business is run. Can you work for them? How much control will you have? These are key questions.”