Smart Business Magazine, June 2019

32 Smart Business Cleveland June 2019 Culture matters in dealmaking BY MATT ROBERTS W hen reviewing a potential M A transaction its important to assess the cultural fit of a buyer as part of the analysis sellers and their advisers go through to make plans post transaction At the end of the day the people within the organizations are going to drive the success of the business If there is misalignment between the business and new ownership it may prevent growth and value creation This is important to consider for sellers who hold onto some equity have earn out provisions or are concerned about the legacy they leave behind There were a few notable businesses in April where this was a common theme specifically the CertainTeed acquisition of Norton Industries Inc s wood ceiling business CertainTeed was quoted as wanting to preserve Nortons entrepreneurial culture and close customer relationships Norton Industries Tricia Rhea noted that CertainTeed shared her companys values of teamwork entrepreneurship and innovation and will be a great fit for its team Alignment of culture was also emphasized in the NSM Insurance Group acquisition of Embrace Pet Insurance where Embrace CEO Ambrish Jaiswal talked about how the cultures of the two companies align seamlessly The companies also discussed their common vision and commitment to customer service To ensure alignment of culture a seller along with the assistance of advisers needs to take time during an M A sale process to learn about the other party what makes them tick and their motivations to make a deal Overall April was another strong month for M A in Northeast Ohio Private equity firms SELECTED NORTHEAST OHIO MERGERS ACQUISITIONS Closed Target Issuer Name Buyer Investor Name Seller Name The Timken Co which won the Corporate Public Deal Maker of the Year Award from the Association for Corporate Growth in January for its transaction activity in 2017 and 2018 continues to grow The company acquired Indianapolis based Diamond Chain Co from Amsted Industries which is based in Chicago The roller chain manufacturer which has been in business for more than 125 years enables Timken to expand its leadership in the roller chain segment and build on its strong position in distribution The deal also adds depth to Timkens manufacturing capabilities in Asia With this acquisition Timken continues to grow its power transmission portfolio Both companies also share a commitment to building and maintaining strong corporate cultures DEAL OF THE MONTH DEALMAKERS INSIDER Local companies in bold Sources Pitchbook such as The Riverside Co Primus Capital and ScaleCo were active PNC Erieview Capital which focus on subordinated debt and minority equity Apr 28 SplashLink WatrHub Charles Fowler Innovation Fund Northeast Ohio Kenneth Langone Mallard Equal Investors Nachson Ventures Apr 23 EngineersGarage com WTWH Media Apr 22 Remington Products Co Gridiron Capital Apr 18 HemaTerra Technologies The Riverside Co Apr 18 Budco Financial ScaleCo Evolution Capital Partners Apr 17 Riceworks Wholesome Goodness Jeffrey Posner Shearers Foods Apr 15 Wealth management business MAI Capital Management CCI Financial Group Apr 15 Elastocon TPE Technologies Inc Aurora Plastics Wind Point Partners Apr 14 Fireguard Protegis Fire Security Align Capital Partners Apr 11 Munchs Supply Ridgemont Equity Partners PNC Erieview Capital Columbus Nova Rotunda Capital Partners Runnymede Investments and Stephens Apr 11 43000 acres of Utica Shale development Pin Oak Energy Partners SWEPI LP Royal Dutch Shell Apr 9 PurePower Technologies Inc Stanadyne Kohlberg Co PNC Erieview Capital Kensington Capital Partners Smithfield Group and IncWell Venture Capital Apr 9 TrackVia Primus Capital Apr 9 OTP Industrial Solutions Genstar Capital Irving Place Capital Apr 4 Nilodor Inc HOSPECO Apr 4 SeniorTV Sentrics Periscope Equity Apr 2 MCSA Group Ltd Park Place Technologies Apr 2 Norton Industries wood ceilings business CertainTeed Norton Industries Apr 1 Diamond Chain Co The Timken Co Amsted Industries Apr 1 Micos Telcom Preformed Line Products Apr 1 Baker Industries Inc The Lincoln Electric Co Apr 1 Connector Tech BJG Electronics Rockwood Equity Partners Apr 1 ProBilt Services of Ohio Inc Fontaine Modification Apr 1 NuTrend Disposables Adenna Apr 1 Embrace Pet Insurance NSM Insurance Group BeauVest Canada investments closed two deals and we saw several publicly traded companies and private equity backed businesses make acquisitions Matt Roberts is a vice president with and runs the Cleveland office for Copper Run Capital LLC Copper Run Capital is a middle market investment banking advisory firm For more information on Copper Run please visit www copperruncap com or email mroberts@ copperruncap com For more information about the Association for Corporate Growth visit www acg org cleveland