It was an impressive year for promotional products suppliers. Our 2018 Top 50 Suppliers totaled $5.3 billion in 2017 revenue, a 14.9 percent increase from $4.6 billion in 2016. For several top suppliers, there was a key component to their success: mergers and acquisitions. Prime Line merged with alphabroder in Dec. 2017, and HUB Promotional Group made several acquisitions, including Beacon Promotions in 2017 and, most recently, Origaudio and BCG Creations.
To gain some insight into the mergers and acquisitions process, and why it proved a smart decision for the companies, we reached out to Trina Bicknell, senior vice president of sales for HUB Promotional Group, and Jeff Lederer, president of Prime Line.
The Process
There’s no defined path when it comes to the mergers and acquisitions process. Lederer explained how Prime made the jump.
“I wasn’t looking for Prime to merge or be acquired, it just kind of happened organically,” he said. “I had gotten to know Norm Hullinger (CEO of alphabroder) over the years at various industry functions. Both companies were in acquisition mode, Prime having just acquired Jetline and alphabroder coming off [the] Bodek and Rhodes merger. Early last year, we realized that the opportunity to merge our companies was an idea worth exploring.”
Once Lederer decided this was an opportunity worth exploring, he had to ask himself several key questions before moving forward.
“I look at situations like this in three separate ways,” he said. “Is this good for the customer? Is it going to help the company’s culture and its employees? And is it good for the company? As a family business with longtime employees, we gave careful consideration to this strategic move and ultimately feel that this is the best interest of both costumers and employees.”
For HUB Promotional Group, the factors that went into the decision were cultural fit, the ongoing roles of the business leaders, the shared vision for the future and price. Once the company decided the partnership made sense, they began work on the details.
“Acquisitions are a form of courtship, and like all courtships, the time to marriage can be long or short,” she said. “Sometimes you make it all the way to the later and sometimes you find out that fit is not right for one or both parties for any number of reasons. Once a proposal has been accepted, the time from diligence work to close is typically 60 to 90 days.”
M&A Advice
Now that these two companies have gone through the mergers and acquisitions process, we were curious if they had any advice to other companies considering the big move. Bicknell shared her insight on the dos and don’ts.
“Be prepared to take your time and follow a process that ensures a high level of confidence in success for all constituents: employees, clients and vendors, as well as principals and shareholders,” she said. “[In addition] a culture clash will lead to a crash. Without shared values and a shared vision, any price is too high.”
Looking Forward
Even though these mergers and acquisitions are still fairly new, our suppliers were confident that they’re already reaping the benefits, and will continue to do so in the future.
“We believe this acquisition makes us the No. 1 hard goods supplier in the industry with a depth of talent, products and services supported by a commitment to serve our clients better than any other company in the industry,” said Bicknell.
Lederer believes that the alphabroder merger put Prime Line on the right trajectory, and he has bright hopes for the future.
“We’re going to continue down the path that we’re on of growing and building value for our distributors,” he said. “Distributors should see only positive opportunities and no changes at all right off the bat. And for the few that occurred later in the process, it was only with the mindset that it’s a good thing for the distributor, and it’s a good thing for the employees, and it’s a good thing for the industry.”
When asked what HUB’s goals are moving forward, Bicknell shared the main objective.
“[Our goal is] for our family of companies to speak with one voice and deliver for our clients on our promises to do more to make them successful than any other promo supplier.”
