Throughout the next few months, we are introducing a series of thought-provoking transition case studies designed to foster conversation and critical thinking around the unique challenges of the family enterprsie. We welcome your comments and feedback below..

Decision Time for the Wheelers: Father-Son or Son-Father?

Bernie and Irwin Wheeler have been an unbeatable father-son partnership in their family-owned chain of distribution centers, which grew to be the region’s largest and most prominent. Because of their business success and uncommonly close relationship, they attracted national prominence and became the envy of their industry. After six months of negotiation, they acquired a distributorship in an abutting territory. Two months later, they were suddenly presented with the opportunity to acquire another abutting distributor which was on the verge of bankruptcy. This would instantly position them as one of their industry’s largest companies.

Bernie, at age 60, was still the entrepreneur. Irwin, 31, while desirous of growth, was more cautious than his father. Retained earnings had grown steadily through the past decade and, for the first time in years, the Company required modest debt to finance its growing inventory and receivables from the first acquisition. Another acquisition would be a great opportunity for increased sales and market control, but would also require a substantial further increase in inventory and receivables.

Bernie and Irwin both thought the income pro formas looked good, but Irwin was concerned. He was not sure that such a major risk was right for the company at this point in time. Meanwhile, Bernie felt that this was the opportunity of a lifetime, and was convinced that the acquisition was the right move. He expressed total confidence in Irwin’s ability to manage the growth. Irwin, meanwhile, had lingering doubts. As he questioned the wisdom of a second acquisition at that time, he also wondered whose decision this ought to be, Bernie’s, or his.

What Would You Do?
Whose decision is it? Should Bernie take control and make the final decision to acquire? Or should Irwin take the lead? How would you advise these two to come together and make a final decision that they both support?

Share your thoughts, advice, and experience in the comments. We will post the conclusion of this case study on our blog in the coming weeks.