Day One

So we all breathed a long sigh of relief. The deal had closed. The due diligence process had not been too bad. We had a great seller in Rick who had poured his heart and soul into the business.

Then came Day One. We had a meeting on Monday morning where Rick announced the deal and introduced the new owners. I felt like the new kid in school moving into town. Rick had done a good job of keeping his intention to sell quiet.

The announcement meeting went pretty well. Rick said his piece and I introduced myself and the other owners. We each had experience with these types of announcements in different contexts (mergers, acquisitions, plant shutdowns, etc). The stress on the face of the plant floor associates is always the same. The first thing anyone worries about is their job: “Will I have one?” “Do the new guys know what they are doing?”

One thing that helped with establishing our culture of open communication is that we handed out a FAQ document that told everyone that no job cuts were planned, there were no changes to pay rates, healthcare, 401(k) etc. Bottom line, it was a strong business that had an owner that wanted to move onto other things and a new ownership group that knew that the associates of the business were the only assets that really mattered.

If you ever have a situation like Adobe’s (see example by Adobe) that will result in job cuts, I highly encourage you to be up front with the FAQ and tell everyone how and when it will be done. You will never get over the loss of credibility if you get up on Day One and tell everyone “everyone’s job is safe” then lay people off. Don’t do it despite how tempting it might be.

I spent the first day getting to know the guys in a very casual way and answering all kinds of questions one-on-one. An end of the day follow-up meeting showed the deeply rooted feelings that people at FabTech had for the business, the quality of work and the strong relationships with our customers. The strong vibe was that the associates didn’t want us to “screw it up.”

I was very conscious of listening extra hard on Day One. I wanted the associates to know that we valued their contribution to the past success of FabTech and needed their expertise and enthusiasm to reach our goals for the new FabTech.

Next week, the outline for our new culture.

On the lighter side, as I watched the NFL draft last weekend, I couldn’t help but think about how much these kids are making and how much training they do to impress scouts. My favorite coach has made a draft training video, check it out here.

The Deal

So, I went to a poker fundraiser tournament. While there, I met a friend of a friend. It turned out that he ran an interior contracting business and had done the finish work on the office of GED. Mike Ritenour, owner of Lou Ritenour Decorators and Landmark Stone, sat at my table and we chatted a little about commercial construction and the trends in green building for interiors and exteriors. No, I didn’t win the tournament, but did make the final table and had a good time.

About two months later, I got an email from Mike and his partners wanting to discuss a business they were looking to purchase. Mike Ritenour had partnered with Mike Orazen, former owner of EPG gaskets and Mike Boehringer, owner of several businesses in the document management and software industries. The three “Mikes” has pooled together some capital to form a boutique private equity fund specifically focused on the building products industry.

The e-mail mentioned a value-added fabricator of architectural door, storefront and curtainwall systems. Long story short, we hooked up and partnered to purchase FabTech in November 2007.

FabTech Inc. was founded 13 years ago by Rick Herrilko and a team of his fellow fabricators from the old PPG/Pittco operation in Cleveland. Rick had built an excellent customer-focused company that thrived on quality, speed and flexibility.

We had found a gem of a company in a market that was strong and growing stronger. We did our financial, legal, environmental and cultural due diligence.

So, I quit my job and became part owner and president of FabTech LLC. I am blessed with a great team of partners. Each of the “Mikes” brings a wealth of experience in management, business ownership, mergers and acquisitions, and product development. We each have our strengths and weaknesses and complement each other with support and challenge each other to be better every day.

We inherited a strong team of nine fabricators and an excellent estimator. Rick has stayed on as a consultant. There is a cumulative 150+ years experience in fabrication and customer service. We had an excellent team and a very strongly embedded culture. However, while the customer came first, we had some improvements to make in the culture and teamwork at FabTech. We did not get into a cultural mess, but wanted to redefine the approach to business and expectations of success and long term growth.

Next week stay tuned for the challenges of getting to know the business on paper versus what happens post closing in the real world. Also, how youth sports coaching and mentoring can help your business.