In January, Prime Line, Bridgeport, Conn., acquired Gaffney, South Carolina-based Jetline, in a move that made big news in the promotional products industry. With two large companies, some might think that it would be a tumultuous process, but Jeff Lederer, CEO of Prime Line, and Eric Levin, executive vice president for Prime Line, told Promo Marketing that the process couldn’t have gone much smoother. The two held their first formal conversation on the topic in August 2015 and announced the deal in January 2016.
State of the Organization
Levin, who was the CEO of Jetline, said that he and his peers sat down on a regular basis to discuss their plans for the year.
“Every year in September, I sit down with a few major people within the organization, and we kind of go through the state of the industry — where we’re at now and what we want to do,” Levin said. “A couple of years ago we almost bought a company, and a few years before that we moved, and this year we said we’re kind of at a crossroads. Do we want to acquire companies? Do we want to merge with a company? Or do we want to be acquired?”
Levin had known Lederer and his family for 15 years. He was familiar with the Prime Line facility and its capabilities, and so when it came down to choosing the right path for Jetline, he went to Lederer.
“We looked at [the situation] and we saw the synergies between the two companies,” Levin said.
The two CEOs looked at their respective companies’ growth and product offerings.
“We said, ‘Holy cow, if you put these two things together, look at it!’ So we got to that level and continued conversations over that month.”
Lederer said the idea of a selection of product and inventory, along with a larger presence along the East Coast, was appealing to both parties.
“We started to get very excited about that, and realized that there was something there,” Lederer said. “So over the next couple weeks, we really started to dig into that.”
Levin and his colleagues decided that the best course of action would be a pure acquisition, and Levin knew that Prime Line was the right company to work with. So the two companies started talking numbers.
Mutual Respect
Levin and Lederer both agreed that one key to the speedy process was basing their negotiations on mutual respect. After all, the two maintained a relationship of friendly competition for years.
“We started to look at the financial implications of it, and we started a structure deal that was mutually beneficial,” Lederer said. “That’s the key thing when I look for deals with friendly suppliers. It’s got to be completely mutually beneficial from both sides. Oftentimes, it’s just a matter of having a discussion about what everyone’s goals are and how to get there, and we were able to get something in the end that worked out for both organizations.”
When executives find themselves in negotiating situations, Levin said it’s key to put themselves in their partner’s shoes.
“Sit down and say to yourself, ‘What I’m about to ask for, or what I’m about to suggest — does it make sense if I’m the guy sitting on the other side of the table?” Levin said. “I think Jeff did a fantastic job doing that, I think Michael Hornig, [former president of Jetline, now vice president at Prime Line], did a phenomenal job doing that. You get big companies buying small companies a lot, but you don’t get big companies buying big companies pretty easily in this industry. And having that happen over a three-month period is pretty impressive.”
Best of Both Worlds
Since the two parties could get the financial aspect of the acquisition out of the way relatively painlessly, they can now focus on building a strong company together.
“One of the things I look forward to the most is taking what I call ‘the best of the best,’ which is looking at what they do in Bridgeport and emulating that in Gaffney, and looking at what they do in Gaffney and emulating that up in Bridgeport,” Levin said. “That’s kind of my job in this process — get to know both facilities and start to put the best practice going forward into the other facility, which I’m excited to do.”
Lederer added that having this combined force of product and process will be huge for the company and its customers. “We’re unbelievably optimistic about the synergy this is going to bring to the combined organization,” he said. “More than anything, we think this will give distributors more choices and consistency with products that are anywhere from 50 cents to $50. With huge inventories, it allows the distributor to have their cake and eat it to when working with Prime and Jet.”
He added that the company wanted to focus on providing distributors the opportunity to utilize a large inventory at a good price, and to deliver these goods in a timely manner.
“It all comes down to people, products and processes,” Lederer said. “And if we do that, again, it’s a win-win for the organization and it’s a win-win for the distributor.”
For more information on Prime Line, visit www.primeline.com.
