A family business is often created for a reason. An executive turns 50 and, with a shrinking runway ahead, and strikes out on his or her own. An inventive young entrepreneur is passionate about an idea, and hast to bring it to life in the form of a new business. Or, in the example of Cell Systems, a father starts a business in order to create opportunities for his children.

In 1989 Carl Soderland added up the cost of sending three children to private school and college and realized that he could never do it on a university salary. He needed to make more money. He started Cell Systems with the express goal of providing education for his kids. Not only did he accomplish that mission, but he also created the foundation for a next chapter, when a new father took over the business in pursuit of education and opportunity for his own children.

Carl worked in a lab at the health sciences department of the University of Washington and was involved in research that used human cells. Researchers purchased growth medium and cells for research. Carl developed the skills to isolate cells, and create growth medium, and realized that he could produce and sell both for a profit.

Cell systems was listed on the biotech industry charts alongside the future Giants of Washington state biotech such as Immunex and others. Those businesses received hundreds of millions of dollars in venture capital and some of them went public. So systems was started with a small Angel round from friends, and ultimately not only funded three college educations, but also enabled Carl to engage in his passion for boats, automobiles, and independence.

Carl achieved his goal. His children were educated and launched into the world when he passed away unexpectedly in 2015. His daughter Lauren Moore took the role of Chairwoman, and Carl’s long-time bookkeeper and confidant Rick Cole assumed the title of interim CEO. The company was profitable, but it was in a holding pattern. Lauren knew that, in order to achieve its full potential, and deliver value to the shareholders, the business had to be sold. She and the board engaged TechStrat to complete the sale.

For TechStrat, representing Cell was a departure from our traditional software focus. However, the business met most of our core criteria for clients:

-Differentiated value proposition and technology.
-Constraints to growth that are solvable through partnership (acquisition) or capital.
-A stable, or growing platform.
-A genuine interest in effecting positive change for management, owners, employees, and the partners that interact with your business.

Fortunately, Cell Systems operated much like a software company. The company has proprietary IP that it resells repeatedly under the same model. Software systems track inventory and sales. The company had clear differentiation from its competitors, in the form of primary cells that provided a superior platform for research. There were also some differences.

Stepping into the Cell Systems scenario, TechStrat applied 20 years of experience in putting the financials in order, creating offering documents, and telling a compelling story.

Packaging the company for sale was one thing. Finding a buyer was quite another. TechStrat took Cell Systems to the biggest players in the industry, such as Thermo Electron, and to niche players supplying lab equipment and technology. After an exhaustive search, the process came down to four bidders: a small public company, a young executive backed by a search fund, and two financial sponsors seeking platforms in life sciences.

In the end, Carl’s family was able to make a decision in context, with several offers, market calibration, and a buyer who respects the legacy of the business and is intent on growing it.

The closing dinner was a family affair. Lauren Moore and her husband brought their child. Jesse Damm, the acquirer, arrived with his wife and two children. As the families gathered to roll out pizza dough and talk about the future, the conversation turned as it always does to the cost of education. But these families had an answer: a father’s legacy. Under his stewardship it had put three kids through school. Funds from the sale would help educate his grandkids, and funds from ongoing operations would support the acquirer’s children’s’ education.

A family business leaves a legacy of memories, adventures and growth with the family members who started and nurtured it. That legacy can be tarnished by a clumsy sale. It can be reinforced and renewed if the sale is handled professionally, and with respect for the family legacy.