A succession plan first discussed a decade ago was enacted April 1, as the second generation at Mid America Metals officially assumed the top leadership role.
The lengthy process at the Ozark-based architectural restoration company culminated with Brandon Donat named as CEO. He took over the role from his father and company co-founder Dale Donat, who had led since Mid America Metals started in 1985.
Dale Donat formed the company with his brothers Dean and Don, and he became sole owner in 2011. He moved to chairman of the board as part of this month’s leadership transition.
Donat said conversations with family members about a succession plan began in 2009.
“What I tried to present to them is that I could get hit by a bus and see what happens or I can plan for this event and make it as smooth of a transition with as little impact on the employees as possible,” he said. “That’s been my intent from the beginning.”
Donat said the plan also was brought up to employees on numerous occasions to keep them in the loop about the company’s direction.
Succession planning also started early at Carson-Mitchell Inc., said Jason Carson, who is CEO and co-owner of the Springfield-based construction company with cousin and President Chris Carson. Their grandfather, Chester Carson, and Larry Mitchell formed the company in 1946, and second-generation brothers Kit, Jim and Doug came on board in the late ’60s and early ’70s.
All eventually took on ownership positions, Jason Carson said, noting he and Chris are now sole owners of the company. The cousins were part of a succession plan executed in May 2018.
“It was certainly in the back of our minds,” Jason Carson said of eventually taking over the family business. “But you don’t know if you’re going to like doing what you’re doing. It takes a while to determine if you’re going to stick with it.”
The Carson cousins both started working full time for the family business in the early 2000s. Discussions to succeed the elder Carsons emerged organically, Jason Carson said.
Chris Carson’s father Kit died in February at the age of 75. He was chairman of the board at the time. Jim Carson, Jason’s father, and Doug Carson remain on the board of directors – roles they transitioned to last May.
Similar to the Carsons, Brandon Donat, 33, has had years of experience in his company. Most recently serving as president, Donat started with the company 14 years ago and now leads more than 100 employees in a dozen offices across eight states. Donat is based in a St. Louis office and plans to remain there.
“I’ll be going to Springfield once a month to show my face at the corporate level,” he said.
Dale Donat said most of the company employees already know his son.
“I’ve made him visible in the few years leading up to this, knowing that this time would probably come where he would become either the next owner and/or CEO of the business,” he said.
“So gradually it was getting the employees used to Brandon. There was a comfort factor with that.”
Mid America Metals refinishes architectural wood, stone, glass and metal surfaces. Donat said some of its recent clients include Toyota Motor North America Inc. for its headquarters in Plano, Texas, and UMB Bank’s headquarters in Kansas City. Its 2018 revenue was in excess of $10 million, with Donat noting the company has experienced annual revenue growth for 31 of its 34 years in operation.
The elder Donat’s responsibilities now cover acquisitions, overseeing the corporate office staff of 10 and working in strategic planning.
He’ll also assist his son as needed. Donat, 62, said he expects retirement is still several years away.
Not a straight path
Throughout the succession process, Donat said the path wasn’t straightforward.
“I thought I would just turn it over to him and we’d structure some kind of deal and get the loans and all that kind of stuff,” he said, adding various financial factors had to be considered. “In a financial liability, for instance, if he goes out and gets a loan to buy the business from me, I have to cosign for that. And I’m on the hook for many, many years.”
Donat said he went through that process with his brothers and didn’t want to again. Knowing a traditional loan wasn’t desired, the Donats explored other options, leading them in the summer of 2017 to hire Slate Partners LLC, a Denver-based boutique investment bank that provides advisory services for mergers and acquisitions. That led to a recapitalization process, which involves a corporate restructuring of a company’s debt and equity mixture to stabilize its capital position.
“It is somewhat of a lengthy process,” Donat said. “One thing I would tell people thinking of going down this process is whatever they put out there that it’s going to take, six months, nine months or whatever, you need to add a few months to that.”
Eventually, a management presentation to 15 potential buyers was organized and held over a three-week period in December 2017. Ultimately, Nashville-based Gen Cap America Inc. made an ownership investment in the company. Terms were not disclosed, but the family maintained full operation of the company upon the May 30, 2018, closing, according to past Springfield Business Journal reporting.
“I wanted to do not just what is right for me and the Donat family but for our 100 employees,” he said of his early goals. “I didn’t want anybody to lose their job. I didn’t want anybody to lose their pay or benefits or anything like that. I wanted things to pretty much go on the way they have for 34 years. Gen Cap presented that option and were clearly better than anybody else, in my opinion. That was a big factor.”
Words of wisdom
Succession planning is a conversation that can take a long time to work through, Donat said, and one that shouldn’t be ignored.
“What I would tell other business owners is you have to explain these things to your employees. They want to know what’s going on,” he said. “A lot of business owners and even employees don’t think about it. But, someday, the owner of the business has to retire.”
Jason Carson said the process should include leaving time for the next generation, or whoever is tabbed with taking over, to be able to learn management and leadership lessons.
“Start early in your planning process so you have time for the former leaders to groom the newer ones taking over,” he said. “That can be a long process to transfer all that knowledge.”
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