Event Recap: Perpetuation & Succession Planning in the Hudson Valley

On June 13, Upstate Capital and Community Foundations of the Hudson Valley hosted an event to bring together business leaders from across the region to discuss perpetuation and succession planning. Eric Allyn, 4th generation owner of Welch Allyn, told his personal story leading the Allyn family’s multi-year process to install good governance, separating interpersonal conflict and the interests of the business, ultimately leading to $2B+ sale in 2015 to the right strategic partner.  March Gallagher, CEO of the Community Foundations of the Hudson Valley, moderated a panel of experts to dive into the successes and failures they’ve encountered in their careers helping business owners plan for the future. 

Welch Allyn, a medical device manufacturer based in Skaneateles, NY, was founded in 1915, and stayed family-owned for five generations. In the early 2000s, the company had $700M in revenue, was internally funded and had a global reach, but the complex dynamic of the third generation led to board dysfunction. They developed a model that included an outside CEO and an independent, fiduciary board. Then, the consolidation of US healthcare providers, coupled with ongoing globalization (especially with manufacturing), created an environment where only the largest medical device companies could survive. Welch Allyn found themselves unable to grow, despite many acquisitions and new products. Talks began in 2012, and in 2015 Welch Allyn was sold to Hill-Rom for a transaction value of $2.25B. Today, the Welch Allyn company continues producing medical devices in Skaneateles, NY.

The panel discussion echoed the importance of preserving the legacy and wealth for business owners. Tomás Durán, President of Concerned Capital, stressed the importance of businesses as fundamental anchors in communities, and succession planning as a key way for business owners to preserve their legacies.

Nick Preddice, CEO of The Affinity Group, talked about examples of business owners he’s known throughout his career, and how their decisions impacted their exit results. Alvino Lo, Chief Wealth Strategist at Wilmington Trust, spoke on the importance of timing. Planning for succession should be talked about early to maximize the benefits for families. Current tax reforms apply to succession, and there are opportunities for business owners to plan accordingly.

The Hudson Valley law firm, Catania, Mahon, Milligram & Rider, PLLC, agrees. The firm sponsored the event, and Michelle Rider, the firm’s partner, said, “Succession planning can be complicated and often includes emotional as well as financial issues when family dynamics are involved. Family-owned businesses need an independent voice, an expert in the field, to navigate the many types of business models and perpetuation options, taking into consideration the undeniable effects of family dynamics on the plan.”

Congratulations to Thomas McGimpsey, Jr. of Hudson Valley Investment Advisors for his raffle win. A $100 donation will be made in his name to the foundation of his choice: The United Way of Dutchess and Orange Region.

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