Mapping a Route to Retirement
A Business Changes Hands, Three Lives Change Direction
After 45 years in his family’s transportation business, second-generation co-owner Butch Klug was ready to retire. Butch had been a big part of the business since graduating from Xavier University, and since buying Klug Buses from their parents, Butch and his sister Mary Jo had built it up to the point where its fleet numbered 35 school buses, 17 motor coaches, and three mini-buses.
But their energy was flagging. “Things had changed. The rules and regulations. The environment. It started to feel like I was in the way of progress,” said Butch. “The business eventually became 24/7, and I think that’s what eventually just beat us up.”
Butch knew what he wanted to do, but he wasn’t sure how to do it. He cared about getting it right — not just for financial reasons. While the business might not be passing to another generation of his family, he still wanted it to land in the right hands.
When Butch and Mary Jo mentioned retirement to their UBS financial advisor, he said he knew someone who could help. Butch didn’t give it much thought, and he soon lost the paper his advisor had given him.
A few months later, though, Butch got more serious. He connected with some people who assigned a rough value to the business. He considered using business brokers but wasn’t sure which ones to trust. Would they understand enough about his business to sell it for what it was worth? Would they have the Klugs’ best interests at heart? Finally, recalling his advisor’s referral, Butch asked him again for that name.
The name was Dino Lucarelli, a mergers & acquisitions authority who leads the Transaction Advisory Services practice at Barnes Dennig, where he’s a director. Dino works with companies on financial and organizational matters in a variety of roles, including valuations and divestitures.
“He had a background as a CPA,” Butch said. “Unlike a business broker – you don’t know how much background they have. He is more than a salesman. He puts the numbers together.”
Dino’s extensive financial knowledge includes decades of experience as a CPA. He’s served as CFO for multiple organizations. And as an adjunct professor for Xavier University’s MBA program, he’s taught courses with titles like “Private Company Sale and Valuation.” Dino recently led a six-part mergers and acquisitions master class in a virtual series presented by Barnes Dennig and Northern Kentucky University’s E-TAP program, providing a detailed overview, insights, and perspective on buying and selling a business.
Right from the start, Butch and his sister liked Dino’s approach, “Mary Jo is a good judge of character and she felt comfortable with Dino. He did some projections and left us thinking, ‘Really?’ We didn’t think it was worth that much.”
Its valuation complete, Klug Buses needed a buyer. As luck would have it, Dino has connections with clients who were looking to buy businesses. He felt that one of them, Aaron Haid, would be the perfect match. And Butch agreed. “He’s young, he’s got that entrepreneurial spirit,” Butch said. “He’s worked for Fortune 500 companies. That’s what you need in today’s world.”
Dino got to work on the details of the agreement. In the end, thanks to Dino’s valuation and negotiating strategies, the Klugs got more than twice what others had estimated they’d get from the sale. What’s more, they felt they had found the right buyer. Aaron worked with them for several months, learning about the transportation business and getting to know the company’s staff. It made for a smoother transition.
Butch was happy with the process. “From the time we decided until the time we closed the deal, it took a little over a year. When we signed those papers – and Dino was so instrumental in that – it was like this great weight was taken off my shoulders. It was wonderful. Wonderful.” he said.
It didn’t take long for Aaron to make an impact. He more than doubled the company’s sales. He also merged the company’s Klug Bus Service and Charter Bus Service units into a single transportation company: Queen City Transportation. Butch is amazed and pleased by his success.
Retirement suits Butch just fine. He spends time with his family and goes to lunch with other retired Xavier grads. But his passion is collecting and restores classic cars. He stared with a ‘57 Chevy, then continued his late father’s work on a ‘37 Packard.
Butch worked hard, saved smart, and, when the time was right, sold well with Dino’s help. Now, he can simply relax and enjoy the ride.
About Barnes Dennig
Barnes Dennig is a Certified Public Accounting and consulting firm serving businesses and organizations in Ohio, Indiana, and Kentucky. We offer tax, accounting, auditing, business consulting, and business advisory services to help our clients make the most of every financial opportunity.
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About Queen City Transportation
Serving the Cincinnati community with regional and continental services for decades, Queen City Transportation has been a leader in the bus transportation industry for 60 years. Queen City Transportation first started as Klug Bus Service in 1959 until 2014 when Aaron Haid bought the company. At the time of purchase, Aaron changed the company’s name to Queen City Transportation as part of his rebranding strategy and entrepreneurial vision to expand the companies it services and see it reach even greater heights. With great success, Queen City began expanding its fleet and growing workforce – providing even more rider services and more jobs to the Cincinnati community. As the result of the recent successes, Queen City garnered the attention of Birmingham, England-based bus and motor coach operator, National Express. As an international leader in motor and rail transit, National Express takes immense care in choosing potential companies to join their family of transportation providers in the United States. Queen City Transportation was an outstanding local leader whose brand values mirrored that of National Express. Safety, Customer, People, Community and Excellence are a strong and closely adhered-to standard for both National Express and Queen City Transportation. By the end of 2017, National Express purchased Queen City Transportation. Still operating under the Queen City Transportation name today, the company is bigger and better than ever and ready to service all of your transportation needs.