AEI has worked to become a buyer of choice through its high focus on culture. “We want to highlight the great things that have made the company what it is today and not disturb or disrupt what a founder or a family has built,” Konert says.
That focus on culture was important for SDC. While SDC did not work with an investment banker, it built a close relationship with AEI through partnering together on projects. “They knew us well, and they were comfortable with the team. We came to a deal on terms in early November, and we ended up closing in early February, so it was a 90- to 100-day process from start to finish,” Konert says.
The SDC acquisition transpired a bit differently than other deals for AEI. “Some companies will spend several months getting ready for an acquisition process with an advisor, making sure they have all their financial information in order and ready to go. SDC was different in that we basically worked together to get the materials needed ready to go for our due diligence,” Konert explains.
Discussions during the acquisition included making sure that integration plans were in place, that everyone agreed on the terms of what the company would look like post-acquisition and how the business processes would fit together.
In taking this approach – of building a large footprint in the composites industry from four separate strategic acquisitions – a well-planned integration process has been critical. That begins early on with communication with employees about what’s to come.
“Anytime you’re dealing with a lot of change – whether it’s changing leadership, changing ownership or changing markets – getting up in front of the employees, having a dialogue and keeping them informed will minimize concern or fear on their end,” Horner says. “You should probably be striving for over-communication because employees are going to be worried. ‘Who is this new group? What’s the long-term plan? How does it affect my family?’”
Shane E. Weyant, CEO and president of Creative Pultrusions Inc. (CPI) in Alum Bank, Pa., points out that a focus on working with companies with a similar culture can also help ease the intrinsic challenges of the M&A process. In 2017, CPI acquired Kenway Corporation, a composites manufacturer it had worked with through the years as both a customer and a vendor. The two firms shared values, business philosophies and a vision for the future of the industry.
“Make sure you understand the culture of the company to make sure both groups are a good fit. Changes will occur and depending on the size of the company and structure, such changes will be a challenge for both groups,” Weyant says. “We look for groups that fit our overall strategic growth strategy and companies that fit our cultural style.”