It’s no secret that acquisitions, mergers and consolidations have occurred frequently in the glass and glazing industry. Bill Sullivan, president of Heartland Glass in Waite Park, Minn., says he, too, had been approached previously, but the time was not right—until now. Heartland Glass has now merged with Minneapolis-based Brin Northwestern.
Doug Nelson, CEO of Brin Northwestern, was also a previous owner of Heartland Glass until Sullivan bought him out in 2007.
“I’ve considered him a mentor and someone I can bounce ideas off,” says Sullivan. “In January I told him I had been approached about being acquired and asked his advice; he didn’t think it was such a good idea and then said, “why not let me buy you out?’” His [Nelson’s] reasoning was he’s 69 and looking ahead to retiring, though I tease him that I will probably retire before he does. He thought we worked well as a team before; and he was comfortable in that we have similar core values in what we look for in employees and how we treat employees and [our belief] that they are the backbone of the company. He thought I would make a good successor when he does retire.”
Though discussions had been in the works since the beginning of the year, Sullivan’s final decision was a few months in the making.
“I kept [the offer] in my mind but didn’t pursue it right away. I also continued to have preliminary conversations with the other entity.” Sullivan says by spring the discussions heated up and together he and Nelson pounded out the details. “We put the finishing touches on in June,” says Sullivan. The merger was a share transaction; no money changed hands, according to Sullivan.
As part of the merger, Sullivan is excited about forming an Employee Stock Ownership Plan (ESOP). “This is a great way to reward employees and they will have a stake in the company now and that will … be better to help carry on and pave the way to a great future,” says Sullivan. “It also allows me the opportunity to have that built in exit plan for when I do want to retire; it can be a challenge to find the right ownership to take care of your employees.” Sullivan says they are constructing the ESOP now and hope to have it in place by the end of year.
In addition, joining forces will also provide added opportunities and benefits for customers.
“It will hopefully allow us to become more competitive and expand [to serve] a wide variety of customers,” says Sullivan. “Heartland, for example, is an Andersen Windows dealer, as well as a dealer for some other window companies. Now our new sister company can expand into that as well; the merger will extend our reach even further than currently and allow us to become more aggressive as a regional player.”
As part of the merger, Sullivan is spending a bit more time commuting to Minneapolis. Two days a week he is working in Brin’s contracts office; the other three days he is in Waite Park. Brin also has a contracts location in the Duluth area as well as a service and distribution facility in Minneapolis. Sullivan says in about a year he will also take over the Duluth operations.
And as for the future? Sullivan admits he may not be done with acquisitions.
“Once the dust settles we will look at opportunities for complimentary companies that will work well in our industry. Not necessarily contract glaziers, but other types of companies such as hardware distributors, etc. to diversify more.” He continues, “I don’t think the economy will ever get back to what it was so we have to be smarter in the way we do business. Smart acquisitions can make us more profitable and we’re also looking to create a more collaborative environment within our own organization and to become more efficient with our resources.”