Adding value before a sale

Stuart Benton, president and CEO of Bradford Soap International Inc., has gone through several sales processes of varying magnitude. Mac Systems, New England’s largest security integration company, was sold to Siemens in 2008, and Bradford Soap was sold to private equity in 2023.

Benton said at the Boston Smart Business Dealmakers Conference that his goal when he joined Bradford was to sell.

“It was very clear,” he says. A family business; it had been owned by the same family since the mid-1960s. The company itself was almost 150 years old. When you walked into the facility, you could see that we were a manufacturer. We called ourselves manufacturers. And we called ourselves contract manufacturers. So what was the value of this company?”

Over the years, they changed the wording, declaring that the company was no longer a contract manufacturer, but an innovative marketing company selling solid personal care products. Although there was internal resistance to the idea, which seemed like a price-cutting exercise to some, Benton saw it as a competitive advantage.

“For an outside value creator, we would never get to a multiple of 13, 20, 15 or anything like that,” says Benton. “We’re talking about multiples anywhere from five and a half to seven and a half. So we’re always going to play down. How could we deliver value? The first thing we did was change the way people would see us. The second thing we did was change our sales proposition.”

When he started the company, a large part of the business was selling commercial soap and hotel soap. Over the years, they have transitioned into this area.

“We took our specialty soap, the formulas of which we own. We developed a recipe, we own the recipe and we make that recipe for the brand manufacturers and channel manufacturers around the world,” he says. “You know the names. You probably see them every day when you walk down the shelf – you’ll never see a bar of Bradford soap. So in December 2022, we were selling maybe 1 percent in the commodity market, we were selling 0 percent to the hotel and we were selling 80 percent of the soap products as high margin specialty soap bars.”

They also worked to create a story of sustainability in their supply chain that they could tell their customers. For example, they sourced their palm oil from a family plantation in Central America. This meant they could tell their customers how the family they sourced their oil from was educating children in Guatemala and providing dental and medical care to their communities. They did the same with shea butter, buying from women in Ghana, which helped them fund their children’s education and medical care.

“When we started selling, we highlighted that we own the formulas and that we have relationships with our customers that, in some cases, are almost 50 years old. We have not had any customer churn, we have never lost a customer. We are a leading player in sustainability in the market, in the industry, in the world. All of this has created value,” he says.