How an Automation Company Strengthened its US Presence with Strategic Acquisition of Niche Material Handling Manufacturer
April 30, 2024
Coesia, a global leader in the automation industry, has acquired Automation & Modular Components, LLC (AMC, LLC), a well-known manufacturer of material handling automation systems. Facilitated by NuVescor Group, this strategic move is set to significantly bolster Coesia’s presence in the US market, particularly in the battery sector and broad-spectrum material handling applications.
Based in Davisburg, Michigan, AMC has carved out a niche for itself in the automation landscape. The company’s expertise lies in the production of material handling automation systems with integrated controls, as well as conveyors that seamlessly fit into assembly systems and production lines. AMC’s diverse clientele is a testament to its versatility, with the company catering to a plethora of industries, including Automotive, Food, Medical, Appliance, Metalworking, Electronics, Packaging, Munitions, Parts Processing, Glass, Pharmaceutical, Alternative Energy including Solar, Container Handling, Household Products, and Assembly & Material Handling.
Alessandro Parimbelli, CEO of Coesia, expressed his optimism about the acquisition, saying “We are glad to welcome AMC into our Group, and we consider this company a strategic asset for the development of FlexLink.”
The acquisition of AMC is a significant step forward for Coesia, and for its subsidiary FlexLink. AMC’s heavy-weight conveyance systems are set to enhance and expand FlexLink’s robotic and material handling expertise.
Dick Shore, AMC’s former owner, is equally optimistic about the company’s future under Coesia’s leadership. He’s confident that Coesia/FlexLink is the perfect fit for AMC to continue its growth trajectory and expand its global footprint.
Shore stated, “Coesia with FlexLink is the perfect home for AMC to continue on its growth path and further expand its global presence, continuing to help companies in over 25 industries across six continents to produce goods faster, with more consistency.”
Coesia’s plans for the future are ambitious, with the Group aiming to continue investing in automation technology. The sector’s attractive growth prospects make it a lucrative avenue for Coesia’s inorganic and organic growth, both in the United States and globally.
Randy Rua, President of NuVescor, the M&A advisor for AMC, lauded the company’s unique capabilities in the manufacturing space. He stated, “AMC is a wonderful business with unique capabilities in the manufacturing space. We wanted to find the perfect fit to allow them to continue to grow in that space.”
The acquisition of AMC by Coesia is a strategic move that aims to benefit both companies. AMC’s expertise in material handling automation systems and Coesia’s global leadership in the automation industry are a winning combination.
The world of manufacturing investment banking tends to focus on everything that comes before the deal: regulatory snafus, final sale price, and the challenges of inertia. But for most companies, success unfolds during the post-merger integration, after the deal is sealed. This success relies on careful planning to ensure the deal realizes its promised value and maximizes time, effort, and talent.
Here are five strategies to ensure that, when the deal closes, you can capitalize on the opportunities and steer clear of potential pitfalls:
Identify and Understand Value Drivers
Start with what creates value for your business. Identify all the ways your business creates value and make a clear plan to succeed on each front. It’s not enough to simply point to potential sources of value. You must have reliable metrics for determining how much these value drivers are worth and how your business intends to drive that value higher. It’s good practice to prepare backup plans and be ready to adapt quickly should market or other factors change.
Know the Importance of Governance Structure
If you’re merging two companies with distinct cultural and operational differences, you’ll need to establish a new governance structure that helps expedite integration and reduces the risk of value dilution. Instead of creating functional teams, try defining cross-functional value-creation groups and focusing on solutions that address multiple functions. Start building your governance structure early in the process. Planning ahead will help ensure a smooth integration of operations and safeguard the value of your business.
Make a Diligence “Clean Room”
During the due diligence phase before closing a deal, having timely access to necessary data is critical. Delays can cause the deal to lose momentum. If you can’t produce the data a buyer needs, they may begin to lose interest. Using a “clean room”, where a neutral third-party vendor or individuals without conflicts of interest share data between the parties, can help you expedite the process. This not only accelerates due diligence but can also help with assessing future synergies and cost savings—a key consideration for integration planning.
Design a Detailed Operating Model for the Value Chain
You must have a deep and complete understanding of both company’s current people, systems, processes, and assets. This is the foundation upon which the team will build the new business, leveraging the respective strengths of each original company. The changes you make to the operating model depend on the type of deal and its goals. A small tuck-in may not require dramatic changes. A transformative deal, by contrast, presents the opportunity to implement sweeping reforms that increase value.
Pay Attention to Company Culture
Culture is an often overlooked element in the deal, and it’s the one that’s most likely to send the deal awry. Shifts in corporate demographics, management style, requirements, benefits, and more can be real challenges for your workforce—which in turn can create serious challenges for the business. The unspoken dynamics—who holds the power, who makes decisions, and how employees are treated—carry immense weight. So, acknowledge these differences openly and find ways to bridge these gaps.
Post-merger success hinges on a seamless integration of two businesses. You’ll need astute planning, foresight, a deep understanding of the two cultures, and the ability to adapt swiftly. Whether you’re in the midst of a merger or contemplating one, NuVescor can help you with integration planning. Contact us to learn more about how we can help you negotiate a successful deal for you and your business.
This blog was originally published in May 2021 and newly updated in November 2023.
Maximizing M&A Benefits: Strategies and Case Studies for Growth
The most successful M&A transactions are those that enable multiple synergies and drive increased cash flow for each participating business, surpassing what each could have achieved independently.
The Benefits of M&A (Mergers & Acquisitions)
When two companies merge, the resulting entity can experience significant revenue growth in several ways:
Diversification of product or service offering. The merged entity can combine its offerings for a wider range of products or services, potentially upselling to existing customers and reaching new ones.
Cost savings. Eliminating redundant functions or operational inefficiencies leads to reduced expenses.
Expanded geographic reach. Access to new customers and markets due to a larger footprint.
New distribution and marketing channels. Opportunities to tap into new market share.
Enhanced products, services, technology, or branding. Improved offerings that better cater to clients’ needs.
What does that look like in practice? Take a look at two quick case studies that demonstrate how companies can benefit when an M&A deal is handled well:
eBay’s Acquisition of PayPal
By leveraging each other’s customer base, offering complementary services, and enhancing customer convenience, eBay and PayPal created synergies that benefited both companies. PayPal edged out its competitors to become the default company for online payments, and eBay eventually required users to use PayPal for transactions. The result? PayPal increased sales volumes and dominated the market, while eBay benefited from the convenient payment processing option.
National Oilwell and Varco International
National Oilwell was a leading oilfield drilling equipment designer in the early 2000s. In 2005, it acquired 51% of Varco International’s stock. Varco was a leading provider of consumable replacement parts and engineered products. The $2.5 billion deal created the largest oilfield services equipment manufacturer in the U.S.
The acquisition allowed National Oilwell to provide replacement parts and maintenance to its oilfield customers at high margins, securing consistent cash flow. It also expanded National Oilwell’s global reach, provided access to Varco’s valuable intellectual property IP, and reduced competition by consolidating vendors.
Due to the merger, National Oilwell magnified its energy sector presence and has gained significant cross-selling options.
Achieving the Goal
The ultimate goal of any merger is to enhance positioning, reduce competition, realize synergies, and drive growth. For a successful deal, the two businesses must have compatible cultures as well as complementary products and services. The deal also must be viewed through a customer-focused lens to ensure that it aligns with the voice and needs of the customer.
Preparation for a Successful Transaction
Before bringing a company to market, the team at Nuvescor Group works with them to identify suitable buyers who meet the criteria for complementary services and compatible culture and are able to capitalize on the opportunities presented by the deal. This meticulous process often results in a more focused experience and higher valuations for clients.
Contact us to learn more about how we can help guide you through your buying or selling journey.
This article was originally published on March 21, 2018 and newly updated on November 7, 2023.
Unlocking Maximum Value: A NuVescor Case Study in Automation M&A
The automation industry is evolving at an unprecedented pace, making M&A transactions in this sector particularly complex and high-stakes. At NuVescor Group, we specialize in facilitating these transactions with a strategic approach that maximizes value for both buyers and sellers. Our recent case study offers a deep dive into how our specialized team and meticulous process led to a significant increase in the sale price of an automation company
A Glimpse into the Case Study
The case study revolves around an automation company that we prepared for sale over a span of 60 days. Our team of experts worked on various aspects of the sale process, from market research to buyer outreach and negotiation. The result? A sale price that exceeded initial valuation expectations.
Key Highlights
Valuation Expectations: Our extensive experience and substantial buyer database allowed us to set an initial valuation expectation for the company in the range of $3.5 to $4.5 million.
Buyer Interest: Within two weeks of launching the project, we received overwhelming interest from more than 80 potential buyers. Our team swiftly filtered and qualified these buyers, ensuring alignment with the seller’s valuation criteria.
Skillful Negotiations: Through strategic negotiations, we managed to increase the purchase proposals to approximately $5 million, exceeding the expected range.
Our specialized focus on the automation industry and strategic approach to M&A transactions set us apart. We understand the intricacies of this rapidly evolving sector and align buyers and sellers who share a common vision for innovation and growth.
For more information on how NuVescor can assist you in your M&A objectives within the automation industry, contact us or book a meeting with Randy.
The Future of the Automation Industry: Is It Time to Buy or Sell?
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On-Demand Webinar: The Future of the Automation Industry: Is It Time to Buy or Sell?
The automation industry is at a pivotal moment. Technological advancements, rising labor costs, and an ever-increasing need for productivity and quality are driving unprecedented growth. As the market expands, business owners within this sector face a critical decision: Is now the time to buy or sell?
Join NuVescor for an insightful webinar that explores the current market trends and factors influencing the decision to sell an automation business. Whether you’re approaching retirement, seeking new ventures, or simply curious about the future of the industry, this webinar is tailored for you.
What You Will Learn:
Market Trends: Understand the latest developments in the automation industry and how they impact your business.
Buy or Sell Decision Making: Gain insights into the factors that should guide your decision to buy or sell in the current market landscape.
Expert Perspectives: Hear from others as they share their experiences and insights on navigating the automation market.
NuVescor’s Approach: Learn how NuVescor’s sell-side services can support automation business owners considering a profitable exit while preserving their business legacy.
Randy provides vision, leadership and extensive knowledge to guide NuVescor confidently towards its goals. He first experienced the M&A industry when he decided to purchase a business through a business broker. Later, as he worked closely with an M&A advisory firm to sell that business, Randy saw true value in working to fulfill dreams through successful business ownership transitions.
As he worked at a few firms over the next five years, Randy began developing his own unique process and experienced great success. Randy founded Rua Associates in 2010, and in 2016 he and his wife and business partner, Tami, decided to purchase NuVescor and apply Rua’s successful process to NuVescor’s clients, seeing immediate results.
Randy has a BS in Engineering from Calvin College and an MBA with a concentration in entrepreneurship from the University of Southern California. He is a Certified Business Appraiser through the National Association of Certified Valuators and Analysts, a Certified Exit Planning Advisor through the Exit Planning Institute, and a Certified Advisor for the Value Builder System. In addition, Randy has served as an adjunct professor at Calvin College and Grand Valley State University.
Eric FoggAdam Crandall Chief Revenue Officer at Addtronics Group Connect on LinkedIn
Adam Crandall is an engaging Executive possessing a winning blend of strategy, business development, operations, leadership, client relationship management, negotiation and communications acumen. Crandall has a successful track record building high-performing teams and leading new commercial initiatives.
Previously, Mr. Crandall served in various senior leadership positions at VWR International (now Avantor), Refractron Technologies Corporation, Micro Instrument Corporation, and Dynamic Design Solutions. In his current role as CRO of Addtronics, he continues to build and lead sales, marketing, and applications teams, while also driving revenue growth.
He embraces challenges with enthusiasm and consistently delivers solutions that optimize performance and create long-term value. With a forward-thinking approach and a commitment to excellence, Adam Crandall is a driving force behind Addtronics’ continued success in the ever-evolving landscape of robotic solutions.
Corey Carolla Engineered Solutions Provider, COMI Americas Connect on LinkedIn
Corey is with Comi Americas, where he focuses on identifying and evaluating new growth initiatives, primarily through strategic partnerships, talent development and long-term corporate strategy, to provide their customers with engineered solutions, across industries and sectors. Corey excels in guiding and supporting companies to create, plan, and execute on their journey to the next level, integrating automation and process improvement to directly impact the company’s efficiency, and their bottom line.
Corey brings a unique skill set coupling his Economic, Business and Workforce Development background with his 25+ years of experience in manufacturing. Having held key roles in Economic, Community, Workforce, and Business development, Corey continues to fuel his passion for business startup, and recovery. Corey has assisted in the creation and implementation of business and economic development initiatives at regional, national and international levels, supporting economic vitality globally.
A key to Corey’s success is his keen ability to identify, create and attract solutions for new and evolving industries. In working directly with key business, community, economic development, and education stakeholders, and industry supply chain, Corey plays an integral role in the strategic planning of activities to support expansion and further development, particularly in manufacturing.
Ready to Sell?
Our initial consultation is designed to understand your acquisition criteria, ensuring a tailored approach throughout the selling process. Schedule a meeting with our team below.
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