Exit Planning and Succession V - A New Chapter
|Chris Mammen (pictured at top right with his employees), CEO, and third-generation leader of M3 Glass Technologies, says of growing up in the industry: “The more time I spent at the shop, the more I could envision myself as a glass man like my dad and my grandfather. Dad instilled this interest by allowing me to learn many different aspects of the business.” Although it’s too early to tell if the fourth generation of Mammens will lead M3, Chris is offering the same support to his own children. “If they do [have a serious interest in the industry], I will be excited to help them learn all they can so they can make their own choice, just as my dad did with me,” he says.|
In late 2015, the Mammen family sold their company M3 Glass Technologies to LongWater Opportunities. The sale, however, was not the end of the Mammen’s three-generation involvement in M3, but rather the next step for the successful family business.
LongWater Opportunities acquired M3 in partnership with the Mammen family, which will retain meaningful ownership of the company they built, and will continue to manage the growth of M3 alongside LongWater. “This is the beginning of a new chapter in the history of our family’s business, and a fitting capstone on the successful careers of our second generation, my father John Mammen and my uncle Jim Mammen,” says Chris Mammen, M3’s CEO and third generation owner.
In 1956, 60 years prior to the company’s outside sale, J.H. and Lorene Mammen founded Mammen Glass & Mirror in Irving, Texas. By the time they were 12, sons John and James began helping out in the shop part time, and eventually full time. In the 1970s, J.H. and Lorene transitioned ownership of the company to their sons, and retired. Today, M3 Glass Technologies is a fabricator of architectural glass used across a variety of custom building and decorative applications, led by John’s son, Chris, who became president in 2002.
Long before taking the company reins, Chris worked summers and holidays growing up and through college. And although John encouraged him to take a job away from the family business to gain perspective after college, Chris took a job within the glass industry at AFGD Inc.
“Our industry is a unique intersection of creativity and numbers. I think that this combination appealed to me from a young age,” says Chris. “The more time I spent at the shop, the more I could envision myself as a glass man like my dad and my grandfather."
After nearly two years at AFGD, Chris came back to M3 and began a 20-year partnership with his dad and uncle to transfer the company from the second generation to the third.
“When I returned to the family business after AFGD, my dad and uncle agreed to a generous and fair ‘sweatequity’ arrangement for me to earn ownership over the years, based on our growth together. This was a unique succession plan that we came up with on our own,” says Chris.
The Mammens included a Buy/Sell Agreement in their succession plan, meaning the company would buy back the stock of a retiring family member, at the price in the agreement, either through cash-flow or some sort of financing. The Buy/Sell Agreement set up between John, James and Chris was valid as a company exit plan up until LongWater’s acquisition of M3 in 2015.
Previous to their decision to sell M3 to LongWater, the Mammens had discussed selling the company on multiple occasions, and had hired a firm to explore marketing the company. Going through the process offered Chris, John and James a better idea of what to focus on to increase the value of the company.
“We learned how outside parties value a company. We learned that if we managed to maximize the value of the company to outsiders, we would at the same time be improving our company and making it stronger, which would benefit us whether we ever sold or not,” says Chris.
LongWater approached the Mammen family with the acquisition proposal in late 2014. The firm focuses on family-owned U.S. manufacturing companies, with the intent to continue growing a successful business, by adding additional resources to the existing management, personnel and business model of partnering companies, according to company officials.
“This model appealed to all three of us, as it ensured the future of the company while allowing the second generation to transition out,” says Chris.
By spring 2015, LongWater representatives began exploring business practices and facilities at M3, and asking many questions over a period of a few months. They then brought the Mammens a letter of intent in May. The due diligence lasted from early June until the sale closing in early November 2015.
After closing, Chris transitioned from president to CEO, effective November 2015, and James shifted to full retirement, effective Dec. 31, 2015. John had retired previously in 2011.
“Since the closing, the team at LongWater has supported M3 in many ways,” says Chris. “They share our passion to make M3 the very best at what we do, to serve our customers the best we can, and to continue to be a unique and successful business in the glass industry.”