Pillars for a Partnership
Intense focus on the deals, Two People One Mind – Jim Needham and I respected and liked each other a lot. We were close. Hence, we talked about many things as good friends and had open discussions. Once, after visiting a target company and heading back, we started talking about the company, its management, products, industry, strengths, and weaknesses, and how we would price and structure the acquisition. We talked at great lengths and covered many aspects of the transaction. Well We were in rural IL and so engrossed were we that we missed the critical exit. We had to drive back one hour just to get back to the exit. Needless to say, we missed our flight, but we concluded we would pass on the company.
Complimentary Skills & Strengths – Jim is a wonderful communicator that has strong people skills. I was the former CEO of an automotive company with deep experience in plant management and turnarounds. When the TMT Recession happened in 1999, we struggled hard with our lenders paying penalties for violating covenants at SPC. Every penny we made went to pay the banks after cutting all the costs we could. I analyzed the liquidation value of SPC and saw the banks were well underwater. We decided to take a strong line in renegotiating the debt. After discussions with our stakeholders, we went to the bank and told them we were walking out and leaving them the company. Jim took out his keys and told them “here are the keys to SPC.” After 3 months of hard negotiations we settled on buying the bank debt at 8c on the dollar and giving them a small ownership stake.
Good & Open Communications – Being a small team, Jim and I sat on different boards. Jim was on the Stone Source board I sat on the Regal Kitchens Board. As the Great Recession started in 2009, the economy suffered. These 2 companies were affected at different times. Business dried up for Regal Kitchens later than for Stone Source. Jim and I kept each other informed of and shared possible solutions. In some situations, we attended the other’s board meetings as observers. To be effective we had to have particularly good communications. As we studied each company’s performance during the Recession and examined the options, we exchanged ideas and possible solutions.