For more than 40 years, Sensit has been committed to protecting life, property and the environment from hazardous gases. A family business, based in Indiana, USA, it delivers innovative life-protecting products while providing best-in-class service to clients.
After two years as part of the Halma family, Sensit’s CEO shares his thoughts about why he sold his family business, why he chose Halma, how the partnership is developing and what the future holds.
When Scott Kleppe, son of the founders of sensor-detector company Sensit, decided to sell his business to Halma, he had reached a point where the business had grown well but there was still more potential. A partner was needed to take his growth plan to the next stage. He wanted to explore options that would maintain Sensit’s strong culture, which was created by his parents, John and Nancy Kleppe who founded the company in 1980.
Like all business owners who are ‘ready to sell’, it was a combination of factors that led to Scott’s decision – fulfilling a commitment to ensuring Sensit’s employees have a long-term future, maintaining his family’s legacy and continuing to remain at the helm to grow his business. This combination of factors meant that he had to think carefully about who to sell to. He knew that selling to a private equity firm or a big multinational could risk losing the unique brand and culture that he and his family had built over the past 40 years. A change of ownership to buyers like these might undo the very thing that made Sensit such a special business.. That’s where Halma provided a solution.
“I knew I would sell as this was the only way forward for the business… Halma appealed as a holding company with a strong purpose”
During his first discussions with Halma, two things stood out to Scott. Firstly, it was clear that Halma knew their stuff. They had a robust way of analysing the growth potential of his business and demonstrated deep experience of bringing businesses like Sensit into the Halma family. Secondly, and most importantly, they shared his values and really wanted to get to know him and his team and where they wanted to take the business. Additionally, they wanted to help Sensit grow as part of a purpose-aligned group of companies. And they respected their knowledge and experience and it was clear in both actions and words that they believed businesses like Sensit knew their products and markets best. They got to know the team in person, and listened to what Kleppe had to say.
“They have provided the partnership I was looking for and Sensit’s integration process has cut new ground”
Now two years into the partnership, Sensit has been able to raise capital to continue their growth. Kleppe credits Halma for ‘walking the talk’ and for consistently providing challenge and counsel to ensure the decisions made have been analysed in the round.
Added to this, continued access to Halma’s network of companies means best practice and ‘lessons learnt’ are shared with peers. And it’s through ‘growth enablers’ that all Halma companies, new and existing, are offered a set of centralised support functions that they can draw on to drive their growth in the right way that suits them.
“The amount of understanding on the effects on different businesses was something to applaud”
All new partnerships take time to shape and Sensit joined Halma in February 2020, as the world began to face the Covid-19 pandemic. Adaptability is the word Kleppe uses to describe the integration process and he explains that being virtual did not lessen the impact of making connections. He believes the integration process has cut new ground for both parties and the roadmap was clearly set out, the financial director had a great deal of requests which were reasonable but required that Sensit built the right support team.
Kleppe smiles as he recalls the experience as, “…nothing revolutionary but it was spectacular”. Adding, “It’s not all plain sailing and that is business reality but the leadership team at Sensit has never felt alone”. He also added that Halma’s structured approach helps its new companies to integrate seamlessly. He notes that there was always someone to speak to – be it his Divisional Chief Executive or the Sector Chief Executive - to discuss any questions, concerns or opportunities.
“If they knew another MD had faced a similar experience to me, a peer would also be available. It felt like a team, working together to get the best outcome”
We asked Scott to share his top five tips for other family businesses like his who are looking to sell.
- Be clear on why you would sell. There are several common reasons to sell such as: retirement; the need for capital; or perhaps to divest the family portfolio. Whatever the reason be sure you are committed to the process as it will be hard work once you begin. Backing out is expensive.
- Consider options. There are a number of ways to sell. Full buyout or partial where you keep some equity. Private equity that may bring in someone to run the business. A small private equity group like a family office allowing you to operate or perhaps a strategic buyer who is building a division of companies creating solutions in a particular market segment. This is the biggest decision you will make in the business and it is best to investigate the options before committing.
- Know what is not negotiable. When I decided I wanted to sell I wrote down five important outcomes. For everyone it will be different but for me, I wanted my employees to have jobs and growth opportunities. That my customers would see this as a good move. The philosophy and culture of the new partners must align with what we created. My family goals would be met and I wanted to remain in the company.
- Know what makes you happy after the transaction is complete. As an owner you didn’t have anyone to answer to. That will change and if answering to someone or the direction the new partners is not something you envisioned, be sure to know it before you commit. Being unhappy is not good for anyone.
- Ask for outside help. If you have never been through this it is often worthwhile involving an outside firm such as an investment bank or consultant with sell-side experience.
