Case Study: Succession in a Family Food Processing Group

Names, locations, and certain details of this case have been modified to protect the confidentiality of the parties involved. The figures and results are representative of the actual transaction.

A Half-Century Legacy

A food processing and distribution group in Castilla y León, founded in 1975, with 165 employees, two production plants, and revenue of EUR 25 million. Fifty years of history. Three generations of relationships with livestock suppliers. A brand recognised in regional distribution. And a 72-year-old founder who, for the first time in half a century, was willing to talk about the future.

Don Rafael — as everyone in the company called him, including his executives — had built the group from a small butcher’s shop in the 1970s. What started as a two-employee operation became, over five decades, a group with two business lines: meat product processing for large-scale retail and a proprietary distribution network across three provinces.

EBITDA stood at EUR 2.8 million — 11.2% of revenue, excellent for the food sector. The company had no significant debt. Clients were loyal. Suppliers were faithful. The management team — a plant director, a commercial director, and a finance director, all with more than 15 years at the company — was competent and committed.

The problem was singular but definitive: there was no successor.

Don Rafael had three children. The eldest was a doctor in Barcelona. The second worked at an international consultancy in London. The youngest was a university professor. None wanted — or could — leave their career to run a food group. And all three had made clear, with affection but firmness, that they would rather sell the company than inherit a responsibility they did not desire.

The Founder’s Dilemma

He contacted us through a mutual acquaintance — another family business owner whom we had advised years earlier. The initial conversation was long and, above all, emotional. Don Rafael did not have a financial problem. He had an existential one.

His concerns, in order:

The employees. 165 people, many from nearby villages where the company was the main employer. “If I sell to a multinational, the first decision will be to close a plant and lay off half the workforce,” he told us in the first meeting.

The suppliers. Decades-long relationships with local livestock farmers who depended on the group as a stable buyer. An aggressive purchaser would renegotiate downward or switch suppliers.

The brand. The group’s name meant something in the region. He did not want it to disappear, absorbed into an anonymous corporate brand.

And finally, the money. Don Rafael lived modestly. He did not need a fortune. He needed enough for his retirement and to leave something for his children. But the price was the last of his priorities.

Our challenge was to design a transaction that addressed all of these concerns — not just the financial ones.

The Transition Structure

We designed a business succession in three phases, spanning 36 months in total, during which the founder progressed gradually from executive director to adviser.

Phase 1: Preparation (months 1-8)

Professionalisation of the management team. Before any change of ownership, the company needed to be able to operate without Don Rafael in the day-to-day. The plant director assumed operations director functions. The commercial director broadened his responsibility to include marketing and product development. We hired an external managing director — with food sector experience and a track record in middle-market companies — who worked alongside the founder for four months before assuming executive management.

Family protocol. We worked with the family to formalise the rules: dividend policy, periodic valuation mechanism, exit conditions for the children, and board composition. The protocol was the foundation on which everything else was built.

Relationship audit. We mapped the key commercial relationships — identifying who depended on the personal relationship with Don Rafael — to design the relational transition plan. We identified 12 clients and 8 suppliers where the relationship was personal and required a formal introduction of the new team.

Phase 2: Transition (months 9-20)

Ownership structure. Blue Mountain acquired 65% of the shares. Don Rafael retained 20% and his three children the remaining 15% (5% each), with a shareholders’ agreement that included a put option at year 5 for the family’s shares — guaranteeing they could monetise whenever they wished without pressure.

Don Rafael as chairman of the board. The founder left executive management but assumed the chairmanship of the board of directors, with monthly meetings. His role: strategic oversight, institutional relationships, and brand representation. He did not intervene in operational decisions — a boundary that was difficult to establish but fundamental.

Stakeholder introduction plan. Over six months, Don Rafael and the new managing director jointly visited the 12 key clients and 8 principal suppliers. Each visit followed the same pattern: Don Rafael introduced the new team, explained the project’s continuity, and the managing director presented the growth plan. No client was lost. No supplier changed terms.

Investment in the main plant. Renewal of the packaging line (EUR 320,000) and energy efficiency upgrades (EUR 180,000). Investments Don Rafael had postponed for years due to lack of energy to manage them. The technical team had been requesting them for some time — executing them immediately sent a clear message: we are here to build, not to dismantle.

Phase 3: Consolidation (months 21-36)

Don Rafael as adviser. From month 21, the founder transitioned from executive chairman to external adviser with a 12-month consultancy contract. He attended the company two days per week, participated in sector events, and was available when the team needed his judgement. Without formal authority, but with a moral influence everyone respected.

Full corporate governance. Board of directors with an independent director, monthly reporting system, weekly management committee, five-year strategic plan. The company stopped depending on a single person.

New channel development. The management team, freed from the inertia of “we have always done it this way,” developed a direct-to-hospitality sales channel that had not existed and represented 8% of additional revenue in the second year.

Quality certification. Achievement of IFS and BRC certifications that opened the door to national large-scale retail — a market Don Rafael had never wanted to enter due to distrust of the major chains.

Results

Metric	Start	12 months	24 months	36 months
Revenue	EUR 25.0M	EUR 25.8M	EUR 27.4M	EUR 30.2M
EBITDA	EUR 2.8M (11.2%)	EUR 2.9M (11.2%)	EUR 3.3M (12.0%)	EUR 3.9M (12.9%)
Headcount	165	165	170	178
Active clients	85	87	104	118
Annual investment	EUR 90K	EUR 520K	EUR 380K	EUR 310K
Hospitality channel	0%	0%	4%	8%

The numbers tell part of the story. The other part is that Don Rafael was able to retire with the peace of mind that his company was still alive, bearing his name, with his people, growing. His children received liquidity and retain a minority stake in a business that continues to generate value. And the 165 employees — now 178 — never suffered the uncertainty of a conventional sale process.

Lessons from a Succession Without Trauma

In our experience with business successions, this case exemplifies what happens when planning starts early and the right things are prioritised.

Time is the most valuable resource. Don Rafael contacted us at 72, when he still had the energy to participate in the transition. Had he waited until 78 or until a health scare, the options would have been far more limited. We tell every family business owner who consults us the same thing: the best time to plan the succession was five years ago; the second best time is today.

The founder is not the obstacle — they are the ally. Too many succession processes treat the founder as a hurdle to be removed. In our experience, the founder is the greatest asset in the transition if given a dignified and defined role. Don Rafael as adviser was worth more than any consultant we could have hired — he knew every corner of the company, every nuance of every commercial relationship.

Culture is inherited, not imposed. The new managing director had the wisdom to observe before acting. For the first six months, he changed nothing visible — not the working hours, not the open-door policy, not the Christmas meals, not the details that made the company feel like a family. The changes he later introduced — more analytical, more results-oriented — were accepted because the team already trusted him.

Patient capital is not just money — it is respect for the process. A three-year transaction is not compatible with a private equity fund that needs to realise returns in five. Here, the horizon was long because the objective was not solely financial — it was to preserve a legacy. And that requires time.

If you have built a company over decades and wonder what will happen when you are no longer there, do not leave the answer to chance. Let’s plan together.