Career Stage 3: Lessons Learned While Buying My Father’s Business
In the first stage of my career, I worked at Vomela Specialty Company as an employer. Although I was being groomed to succeed my father as its leader, he never let me get special treatment as the boss’s son.
During Stage 2, I served as Vomela’s CEO after my Dad bought full ownership of the business from founder Jack Vomela and stepped back from day-to-day operations. With my Dad’s guidance, we totally restructured the company to prepare for future success. Our gross margins and profits were off the charts.
In my mind, the next step was as simple as it was obvious: I would buy the business from my father so he could retire to live the life he envisioned for himself and my mother.
I began trying to purchase Vomela Company in 1985. Clearly, the first step was to approach my father, to try to get the same sweet deal he secure with Jack Vomela when he bought the company. Jack Vomela had loaned Carlo some of the money my dad had used to buy Jack’s share of the company. He had also allowed Carlo to carry debt and pay off the loan over time.
The response from my dad when I asked him for money? “Call your friends at the bank.” Well, that didn’t work out as I was expecting. Still, I was determined. I did call the bank, but was turned down. It was only when I partnered with an M&A expert that the bank even considered lending me money. Tom Auth was big-time in the M&A industry. But — I held the trust and respect of the existing clientele: Tom wasn’t getting anywhere in the business without me. With Tom’s M&A reputation and my rapport with existing clients, the two of us were able to buy Vomela Specialty Co. from my father. I was now co-owner of Vomela.
I had no idea the trials that were in store for me during this period. Over the next five years, I learned several harsh truths that would shape my future with Vomela and lead to my eventual departure in 1993.
Lessons Learned
Financial stability matters. As a business owner, my father wasn’t going to sell me the business for any less than he might be able to get for it on the open market. After working to raise 11 children, he and my mother were looking forward to traveling and enjoying all of the fruits of his hard work and an empty nest.
I entered the buying process seeking sole ownership of Vomela. To my shock and dismay, this was when my wife had had enough and announced that she wanted a divorce. The travel and long hours I’d invested to help grow the company had eroded our relationship and resulted in the end of my marriage.
I thought I had been giving my wife everything she wanted while I was achieving everything I wanted. But when I was served with divorce papers, I realized she hadn’t gotten the life of her dreams. The divorce papers also meant that I wouldn’t get the life of my dreams either.
To avoid legal complications, my father refused to sell the business to me until the divorce settlement was finalized. That settlement was fair to my ex-wife, but costly to me.
So money – or lack thereof – crushed my dream of buying the business outright. In order to purchase the company, I needed a business partner. That’s when I was introduced to Tom Auth.
Know your financial partners. Business buyers have multiple options for financing their purchases today, including family offices, corporate venture capital, or private equity groups. Before teaming up with a financing partner, make sure your vision, values, and ethics are aligned.
Tom was a financial expert with experience. He’d already bought more than 30 successful companies by the time he entered Vomela’s radar, so he knew the game. Tom saw Vomela’s potential for growth during the digital transformation of printing and wanted in.
For me, my dream of purchasing the business was emotional. But for Tom, it was just another business deal. My father instilled in me the values of risk-taking and gut-listening, but Tom took a more pragmatic approach to business: He followed the money.
When I met him, he said he wanted to keep Vomela. It was his biggest investment at the time, and our historic bottom-line profit and huge growth potential made us a good bet. But he knew he couldn’t do it alone. He needed me.
After careful consideration, my father decided to sell Vomela to Tom and me in a 60 – 40 split. I went from dreams of independent ownership to the reality of being a minority shareholder. It was a tough pill to swallow.
Reputation matters when raising funds. Even after I accepted the terms of the deal, I still didn’t have enough capital to purchase my 40% share.
So, I went to the bank. That’s when I, once again, realized the importance of being surrounded by the right people, and more importantly, money.
You can’t underestimate the significance of relationships, credibility and personal guarantees in business. Had I entered the bank as just “Rock LaManna,” they might have turned me down. However, hearing of Tom’s involvement was all the credibility the bank needed to approve my request.
By this time, Vomela was humming. We had increased our staff from 35 employees back up to 150. Between Vomela’s success and my newly acquired capital, it was time to seal the deal with my father. My future looked rosy and I was happy.
Little did I know that my business life would take a dramatic turn just 3 years later when Tom asked me to leave the company.
About the Book
My memoir, They Named You Right, is a personal story about my father, the label-converting business he built and acquired, and some of the hard lessons I learned when he sold the business to me instead of one of my 10 siblings. It’s a cautionary tale about what happens when family wants and interests clash with what’s best for the business and details the consequences of prioritizing business over people.
Get your copy at theynamedyouright.com. All proceeds from book sales will be donated to charitable organizations close to my heart, including Clinics Can Help in West Palm Beach, FL and South St. Paul Educational Foundation.