Insight

There Is No Playbook for a Successful Exit

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Every leader in a private equity backed business feels the pressure to deliver a successful exit. The investors expect it, and the leadership team builds towards it.  

The process feels like it should follow a clear, structured plan.  

But what happens when the most successful outcome originates from a chance conversation in a factory, not a formal M&A process? 

In a recent episode of Chat CFO, Stephen Loftus, CEO of Wattbike, shares the story of taking the company through a successful trade sale.  

With a career that started in the corporate FMCG world at Diageo and Red Bull before moving into the SME space with leadership roles at Brompton and now Wattbike, Stephen explains why the most valuable connections are often made outside of a formal process and how a leader’s network can become their most powerful asset. 

The exit that came from a factory tour  

When Wattbike began its exit journey, the company followed the expected path. They engaged advisors and started a formal process to identify potential trade buyers.  

Yet the deal that ultimately succeeded came from a completely different direction. It started with an informal conversation during a factory visit eighteen months earlier. 

While touring a manufacturing partner, Stephen noticed a smart, integrated fitness product. He asked about it and learned it belonged to an innovative US business called Trainer.  

Later, at a trade show in the United States, he saw the same product on a distributor’s stand and was introduced to the founders.  

“We started chatting and we suddenly saw all this overlap,” Stephen recalls. That informal networked opportunity, born from curiosity and conversation, was the one that came to fruition. 

“Even when you’re going through a formal process, which we did at Wattbike, work from a networking perspective yourself. We had great partners through the process, but you might well bring a person into that process which you wouldn’t necessarily have identified if you go through a more logical approach.” – Stephen Loftus, CEO of Wattbike 

Your network is your net worth  

Stephen’s experience with the Wattbike sale reinforces his deep belief in the power of networking. He sees it as an intrinsic part of a senior leader’s job, a way to short circuit challenges and find opportunities that a structured approach would miss.  

He encourages leaders to say yes to coffees and lunches, because you never know where the conversation might lead. 

He also believes in paying it forward, a lesson learned when senior executives gave him their time when he was a young professional. This two way process of helping and being helped builds a powerful web of connections.  

In the resource constrained environment of an SME, that network provides a vital source of advice and support, helping leaders make better decisions without making too many costly mistakes.

From corporate structure to SME chaos

Before leading SME brands like Brompton and Wattbike, Stephen spent years in the corporate world. He advises anyone making a similar transition to prepare for a significant cultural shock. The key is to focus on the few things that matter and to get comfortable with imperfection. 

He remembers the advice he received from the CEO at Brompton when he first joined. “You’re going to have to walk past a lot of stuff.” In a smaller business, you cannot fix everything at once.  

A leader must prioritise ruthlessly. The role demands wearing many hats and making judgments with limited resources, a stark contrast to the well-funded, structured environment of a large corporation.

The power of mentors  

Throughout his career, Stephen has been guided by mentors who provided him with invaluable, and often contrasting, advice.  

His first boss, Richard Brown, was a strategic planner who taught him the importance of structure and foresight. He lived by the “six Ps” which are “piss poor planning equals piss poor performance.” 

Later, at Red Bull, he worked for Harry Dinnock, a former Vietnam fighter pilot who was all about ideas and execution. Harry’s philosophy was to get ideas to market quickly, learn from customer feedback, and adapt. The blend of these two perspectives, one focused on planning and the other on action, created a powerful mix that has guided Stephen’s leadership style ever since.

“Everyone just by human nature likes to help and support others, I believe. Do look proactively for your own mentors if they don’t just come naturally through the people you work with and bosses.” – Stephen Loftus, CEO of Wattbike 

Leading through the headwinds 

Taking the helm at Wattbike as a first time CEO, Stephen faced a series of intense headwinds, from Brexit and COVID to a tough consumer market. His approach was rooted in transparency. He believes in being open with the team about the challenges the business is facing, trusting that people can handle the truth and will rally together to find a solution. 

He uses quarterly staff surveys to maintain a constant feedback loop, tracking the employee net promoter score and acting on the feedback, both big and small. This commitment to listening and responding has helped build a strong, resilient culture where people feel valued and understood, even when times are tough. 

 

Key takeaways from Stephen’s insights  

  • An exit process is not always linear. The most valuable opportunities can come from informal networking, not just a formal M&A process. 
  • Build your network continuously. Your connections are a strategic asset that can help you short circuit problems and uncover unexpected opportunities. 
  • Prioritise ruthlessly in an SME. When moving from a corporate to a smaller business, you must accept imperfection and focus only on what truly matters. 
  • Seek out mentors with different perspectives. A blend of strategic thinking and a bias for action can provide a powerful leadership framework. 
  • Lead with transparency in tough times. Trust your team with the truth and they will help you find a path through the challenges. 

Listen to the episode of the STOIX Podcast

To hear Stephen Loftus’s full conversation, watch the complete podcast episode here:

To connect with Stephen or explore more of his experience and insights, head over to Stephen’s LinkedIn profile.