Written by Ian Cassel
In 2001, Selim Bassoul became CEO of a $40 million market cap microcap called, Middleby Corporation (MIDD).
He had joined Middleby in 1996 and turned around the company’s Southbend division, and in 1999 became COO to help turn the rest of the company around. In 2001, now the CEO, he had the weight of the entire company on his shoulders, but he was confident in his abilities, strategy, and the Middleby Brand.
He was so confident that he sold his brand new home so he could buy shares in Middleby and become the second largest shareholder in the company. Selim Bassoul, mentored by Jim Sinegal (Co-Founder of Costco), was an intelligent fanatic in the making.
Over the next 15 years, Selim Bassoul would transform Middleby Corporation from an unfocused, cultureless, slow moving, sleepy food equipment manufacturer into a compounding machine.
Under Bassoul’s leadership Middleby Corporation’s revenues have grown from $101 million in 2001 to $1.8 billion in 2015, cash from operations has grown from $13.9 million to $249 million, net income has grown from $1.6 million to $191 million, while the amount of shares outstanding has remained relatively the same.
Middleby shareholders have seen shares appreciate at a compounded annual return of 38.6% over the last 15 years (100+ Bagger).
All great companies started as small companies, and at some point most great companies were either founded or operated by an intelligent fanatic.
As investors, we analyze the lives and businesses of known intelligent fanatics so we can better find the next one before others. Sean Iddings and I are working on the Intelligent Fanatics Project and we’ll be releasing our first book later this year.
Selim Bassoul’s Journey
Selim was born in Lebanon and at the age of 12, and he remembers Beirut falling into civil war. His family was well connected in Lebanon and were “asset rich but cash poor”. During this time Selim remembers overhearing a conversation between his father and mother and his father saying, “I have only $20 left in my pocket. That’s all we have now. What am I going to do?”.
It made a big impression on young Selim. “I knew in that moment I would never be poor,” Selim says.
Selim’s parents were very proud and honorable people, but times were tough. Salim was close to having to quit school to find work, but his parents refused to give up.
“I recall my mother shaking me by the shoulders and saying, ‘You will never work for anyone else,’” Selim says. “That had a big effect on me.”
Selim excelled as a student, achieving the highest grades in his class. He would attend the American University in Beirut, and then move to the US for post graduate studies at the Kellogg School of Management at Northwestern University.
His parents had to sell a piece of land that was meant for their retirement to fund Selim’s college education.
“I will never forget the sacrifice they made. They sold the only asset they had left to send me to school. It shapes your personality and your ambition”, Selim said
One of the biggest lessons he learned at Northwestern was from a finance professor.
“He said to me, ‘It doesn’t matter how rich you are, how financially solid you are, cash is king. You have to manage cash.’ I got that ingrained in me.
We don’t run our company through net income, we run it through cash.
Coming from a culture in the Middle East where cash is everything, it meant something to me. There was no borrowing to be had in during a civil war. It was all about cash.”
After graduation Selim would work for eight years in the healthcare industry for American Hospital Supply and Baxter Healthcare working a variety of positions.
He then pivoted from Healthcare into Foodservice and worked for eight years for Premark Inc, as director of marketing of the cookchill division and then later as VP of Sales for the Vulcan cooking division.
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