Sometimes, it is time to sell the business

Three generations of the Mullet family worked at Excel Industries. This 2005 photo shows Roy Mullet, seated on one of Excel’s Hustler turf machines, who served as Excel’s president from the early 1960s until 1985. Others in the photo (l-r) are Paul Mullet (Excel’s president from 1991-2018), Paul’s sons Adam and Chad, Bob Mullet, and Bob’s son Luke.

Excel Industries decision made over $100 million available for charity, provided exit for shareholders, former executive says

Sometimes, the sale of a family-controlled business is better than trying to pass it on to a third generation of family management. Especially when the interests of 40 shareholders from multiple generations of several families have to be considered, Bob Mullet says. Mullet knows of what he speaks. He had a front-row seat to the events leading to the sale of Excel Industries to Stanley Black & Decker for $375 million US. Not only that, he thinks that his father, who headed up the firm for over two decades, would approve. “If Roy were around, I think he would be pleased.”

Excel Industries was started in 1960 in Hesston, Kansas. Two years later, Roy Mullet joined Excel at the encouragement of Cal Redekop. Redekop, an academic and entrepreneur who later launched The Marketplace magazine, was an Excel shareholder. He also worked at the company during a sabbatical year. Roy Mullet became president soon after joining Excel. He served in that capacity until 1985 when he retired at age 65.

The company grew with John Regier’s creation of The Hustler, the world’s first zero-turn mower, which went into production in 1964. The design helped people mow irregular yards, and zero-turn mowers are now commonplace within the mowing industry. Roy Mullet’s son, Bob, worked for Excel in the summers, learning double-entry bookkeeping in the office. He was not involved in the firm directly until the mid-1980s, when he took a board position. After leaving Kansas, Bob did part-time sales work for Excel “in the territory around Paoli,” a small town in southern Indiana.

In 1993, he moved to Kansas and took on the role of chief financial officer for Excel. Eventually, he also became responsible for human resources and manufacturing. “I was kind of the, if not by title, at least the de facto COO (chief operating officer).” Bob Mullet retired from the firm in 2018. His brother Paul joined Excel after graduating from Bethel College in 1972. Paul Mullet was Excel’s president from 1991 until he retired in early 2018. Then Excel recruited an external CEO. Joe Wright, Excel’s final top executive, was no stranger to the industry. He worked for Briggs and Stratton, the world’s largest manufacturer of engines for outdoor power equipment, for most of his career.

Wright oversaw operations at Excel and prepared it for an auction that led to its sale to Stanley Black & Decker in 2021. At the time of the sale, Excel had 630 employees. It sold its products through more than 2,500 US retailers and 25 distributors worldwide. In the last decade before Excel was sold, the firm had about 40 shareholders. Most of those people were members or descendants of the five or six families that had been involved with Excel since the 1960s. “I felt that Excel was, we were increasingly a company that was owned by disinterested outsiders … people that had never worked at the company,” Bob Mullet recalled.

Treating those people fairly was a challenge, he said. On the one hand, buying them out would have created an unaffordable cash drain on the firm. Since Excel did not do that, ownership just became more and more diverse. The group that was in charge of the company had “if not an absolute majority, at least a working majority,” Mullet recalls. Despite paying dividends, having that many shareholders left management feeling a sense of responsibility, he said. “I think a lot of those people were in what a financial advisor would say was a pretty bad position, which is they were undiversified. They had an illiquid investment, over which they technically had no control.”

Mullet recalls another company, a family business in which one or two of the siblings worked in the firm. Three or four others did not. The company “got into the habit of paying a lot of dividends, so the non-inside sibling pretty much depended on that. That’s what they lived on.” When an economic downturn came, and things got tough, the company continued to pay the dividends despite losing money. Eventually, that firm’s bank came in and told the firm they could no longer pay the dividends. “You can imagine what that did to the family dynamics.”

“One of the things about the sale that was to me a clearly good thing was all of a sudden everyone’s got liquidity, and so all shareholders who had charity things in mind, now they can fund them.”

— Bob Mullet

In Excel’s case, the majority of shareholders were descendants of Roy Mullet, his brother, Henry, and his brother, Tim. For the first 50 years of Excel’s existence, Mullet family members made up about half the board. Other minority shareholders were represented as well. Prior to 2010, Excel “made a very conscious decision that we wanted to get outside board members,” Bob Mullet recalls. Excel recruited people with diverse skills to serve. That left only Bob and Paul Mullet as family members serving on the seven-person board.

Charitable giving was a strong part of Excel’s culture, Bob Mullet said. “My Dad was a firm believer in the 10 percent tithe (money given to charity). So, for a long time, Excel just consistently gave 10 percent of their profits. As the company got a lot larger, you know, all of a sudden, that became a really big number.” Eventually, some people began questioning whether giving away that money was fair to shareholders. “But in anticipation of the sale, a lot of the (Excel) stock got donated, most of it to (the philanthropic arm of) Everence (Financial). At the time of the sale, Everence actually owned 30 percent of the company.” That means $113 million will eventually flow to charities through donor-advised funds or foundations held at Everence.

“One of the things about the sale that was to me (Bob) a clearly good thing was all of a sudden everyone’s got liquidity, and so all shareholders who had charity things in mind, now they can fund them. That’s been real positive, and I think that it’s also very consistent with the long-standing philosophy of Excel.”

Bob Mullet had a son working at Excel, and two of his brother Paul’s sons were also working there. “I certainly felt some sympathy, I think, to the pressure that those guys would have faced if we had said: There’s a family business you guys have to take over. You run it. I mean, that’s a big responsibility. So I think that’s one of the things that family businesses have to deal with, right? If we wanna keep this going and going as a family business, number one, are there family members coming along? Do they have an interest in doing it and do they have the talent and the ability to do it?”


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