Having Our Cake & Eating It Too

Nye Lubricants, Inc. traces its roots all the way back to 1844—the height of the whaling industry. By 1900, the company had become the premier lubricating oil manufacturer in the country, sourcing its raw oil from the whalers hailing from the Nantucket-New Bedford region.

The Mock’s became owners of this storied business in 1956, and like many family business members, brothers George and Fred Mock grew up with their family’s dinners also serving as quasi-board meetings.  From 1963 to 1986, their father led Nye’s transition to 100% synthetic lubricants and grew sales from less than $50,000 to over $3 million. After college, business school, and a brief stint at IBM, George joined his father George Sr. at Nye in 1986 as employee number 17. Younger brother Fred would follow suit, joining in 1994 after law school.

By 2000, George had succeeded his Dad as President of Nye.  Soon after, a part of the family expressed its desire to exit the business and on their own, unexpectedly tried to find a buyer for their ownership, by seeking a new owner for the whole business. As that process failed, George and Fred gained ownership control by redeeming stock from certain family members, bank borrowing which they personally guaranteed, and in part by creating an Employee Stock Ownership Plan (ESOP). They emphatically committed to each other: “Someday, if we ever decide to seek a new owner for the business, we will do it the right way, with a thoughtful approach, and with the guidance of expert advisors.”

By 2014 the Company had prospered and evolved considerably. The business served a wide range of high and low volume customers in high-tech and low-tech applications utilizing their vast library of over 1,000 proprietary formulations. Since George and Fred joined, Nye was able to increase its sales 10 times, and expand its reputation as a worldwide technical leader in synthetic specialty lubricants. It became a leading supplier to the U.S. automotive industry and its production facilities grew to become a significant employer in the region. The company even earned the trust of NASA with Nye products selected for the most extreme conditions required by the Mars Rover spacecraft. Nye Lubricants was able to humorously label its long evolution as “From Whaleships to Spaceships.”

As with all successful game changers, the increasing demands to bring in new talent, capabilities, and investments to sustain the growth and success of the business was a continuous conversation for the family. What to do next began to feel like a very stressful responsibility, not only as owner-managers of the family business, but as stewards of this enterprise with such a long and rich history upon which so many families depended. There were more questions than answers at the family holiday dinner “board meetings.” What did Nye need to compete effectively in the global lubrication market? How much capital did the company need? What was the company worth? Which partners would most appreciate the Nye brand? Would operations stay in Fairhaven, MA?  What type of company would the Mock’s be comfortable with passing the ownership of Nye to? What would an acquisition mean for the company’s long storied history? There were no simple answers.

George and Fred Mock were introduced to Bigelow in 2014 and began having regular discussions to frame the recurring questions. What was the ideal next chapter for the company and for them individually? Bigelow provided some “tough love” on how outside investors might view certain aspects of the business and proposed a multi-pronged Enterprise Value creation plan. Over the next 5 years, Bigelow collaborated with George and Fred on these improvements so one day, when the family was ready to find a new owner, the company would be ready as well.  George and Fred courageously executed on those numerous strategies brilliantly. George memorably declared to the Bigelow team, “I want my cake and to eat it too. That is, I am determined to assure the future success of Nye with the best fit new owner, AND I want to access the freedom for my family and ESOP members that comes from achieving liquidity of the Enterprise Value we have all worked so hard to build.”

As part of the Enterprise Value creation plan, Bigelow facilitated Nye engaging a third-party consultant to perform a market study to better understand the company’s end-markets and identify where Nye’s technical expertise made them most deserving to win. This analysis drove George to focus their sales and marketing strategy to specific high-growth, high-value end-markets like medical and aerospace, and to de-emphasize automotive. Management said this study gave them the courage to raise prices in niche markets where they brought the most value, which had remained relatively flat for several years. The Mock’s also attracted fresh talent to their senior management team, tightened their supply chain, expanded their tribology lab, and invested in more R&D capabilities.

By 2019 Nye Lubricants was selling its proprietary formulations to customers with mission-critical lubrication challenges in over 50 countries, surpassed $50 million in annual sales, and was widely regarded as the most innovative specialty lubricant provider in the world. With such rapid improvement in the company, there was even more pressure on the family to make sure they found the right next owner who would value the company’s capabilities, employees, and legacy. After much deliberation with Bigelow, the Mock family felt that the timing was right to seek a new majority owner for Nye.

Now formally engaged with Bigelow, the Mock family fully explored the best fit investors for the company worldwide. Ultimately the Mock family chose Mannheim, Germany-based FUCHS PETROLUB as the perfect match for Nye.  FUCHS describes themselves as a billion-dollar family-owned business. They are a publicly traded company, but majority controlled by the Fuchs family who founded the Company in 1931.  Nye was able to expand FUCHS’ offerings into the most technologically-advanced and highest-end lubrication product lines. The R&D and manufacturing capabilities of Nye would become Fuchs’ new center of excellence and FUCHS’ global footprint and resources would allow Nye to aggressively expand internationally.

Through the transaction, over 100 employee participants in the company’s ESOP were able to realize a capital gain from their stock ownership far exceeding any valuation ever discussed or expected. Complicated multi-generational family ownership of associated real estate and businesses in addition to Nye Lubricants, were successfully resolved through the transaction. The partnership with Fuchs asked that George continue on as leader of Nye, but without the day to day administrative burdens. Fred Mock was freed to act on his desire to transition quickly out of management and onto his next personal chapter.

George and Fred created an enterprise with world class name, reputation, and performance during their time leading Nye, further building upon their family’s success. While working with Bigelow over the 5-year period prior to the transaction, the Enterprise Value of the business more than tripled. In direct contrast to the “disaster sale attempt in 2000,” the Mock family was methodical about finding the right partner to shepherd the company into the future. No longer having to be personally responsible for sustaining the company was a great liberation to both George and Fred. The entire Mock family was left feeling that the family legacy and storied history of Nye were in the best possible hands and that they really did accomplish “having their cake and eating it too.”