Jeff Polovick has spent the better part of his life running Alberta-based car rental company Driving Force—38 years to be exact. Polovick has loved every minute of it, but he knew there would come a day when he’d be ready to step away from it all. “We all must select a best-before date for ourselves,” says the company’s founder and CEO, who studiously avoids the word retirement.
But like many business owners, Polovick, who will be speaking at the PROFIT-sponsored Business Transitions Forum in Calgary on November 16, faced a predicament: Neither of his children was interested in taking over the family business, and he had no clear alternatives for succession. While he was weighing his options, the 2008 financial crisis hit, and a key lender stopped backing Driving Force.
Facing a cash crunch, Polovick sought out a new partner. In August 2010, Polovick sold half of his business to a private equity firm, and invited seven members of the Driving Force leadership team to buy a stake in the company. “A private equity firm typically wants to stay invested for five to seven years, and that was in line with when I was planning to leave,” he explains.
Over the follow two years, Polovick used his new partner’s capital to grow Driving Force’s footprint some 200%. Pleased with the company’s performance, the private equity firm began looking for an exit in 2012, and Polovick opted to slowly reduce his stake in the company as well. An extensive search for a buyer ensued, with an initial field of 75 candidates narrow down to seven, then one. “I sold another 10% of my shares last year to the partner we chose, so now I own 15% of the business,” Polovick explains.
Though circumstances forced his hand a little, Polovick is pleased with how things have turned out. The experience and resources the private equity firm brought to the table proved particularly useful: “The thing that I learned is that it’s really valuable to have a partner who has been through the process, who understands the things you have to go through to pass that finish line,” he explains.
His advise for those looking to transition their business? Consider private equity, and choose your partners with care. “This whole thing could have looked very different if we had gone with someone else,” he says.
Jeff Polovick will share his exit advice for entrepreneurs and business owners at the Business Transitions Forum, which will be held on November 16 and 17 at Calgary’s Metropolitan Conference Centre.