We have never sold a business. It does not form part of our investment thesis. Why? Because as soon as you start to entertain the sale of a business things change.
1. Underwriting - We build our investment thesis on a hold-forever philosophy. We build it on cash flow. Once a possible sale enters the equation it is easy to start factoring in things like multiple expansion. That can make underwriting sloppy and lead to poor decision-making.
2. Seller Promise - We tell the people who sell us their businesses that we will hold them forever. This commitment gives us an edge in negotiations. If we start flipping their life's work the next seller will have no reason to believe us.
3. CEO Promise - We tell our CEOs we will hold forever. If they see us sell another business in the holding why should they believe us? We will lose our credibility and their trust, which will affect turnover and performance.