How 15 Consulting helped State Metal Hose work through a messy acquisition, and come out on the other side with a profitable transaction and the foundation in place to materially increase revenues and profitability in 2019.
Industrial Goods Manufacturing
WHAT WE PROVIDED
to establish a third-party valuation of the business and conduct financial and operational due diligence to ensure a profitable transaction and prevent unexpected surprises after closing.
Optimization & Mentorship
to ensure a profitable transition, provide month-to-month guidance, establish a clear path to increases in profitability, and execute a growth plan to expand sales territory and continue to scale up revenue and operations.
State Metal Hose
State Metal Hose is a small industrial products manufacturer centered in Columbus, Ohio. They engineer and manufacture water-formed, flexible hose assemblies for numerous industrial product manufacturing applications, including customers like General Electric, Bayer, Owens Corning, Anheuser-Busch, Rolls-Royce Energy, and Battelle.
Concluding an unexpected partnership buyout
Then co-owner (now CEO) Thomas DeCamp Jr. (TJ) was faced with a difficult situation. Unfortunately, his business partner unexpectedly passed away and as a result, he received a buyout offer he wasn’t sure how to evaluate. On top of that, he was thrown fully into the day-to-day operations of the business.
“I was doing everything. Day-to-day operations and spending however much time necessary to get all the paperwork, all the reports on the financials in order. It was a complete mess. It was stressful to the max.”
Thomas knew the business had potential to become something much more than it was and was committed to seeing it through, but didn’t know the best way to proceed through the process.
Acquisition Assistance and Mentorship
After discussing the problem with another local Ohio president in the industry, Thomas decided to bring in Warren and 15 Consulting to assist with the acquisition.
“Quite frankly I had never even contemplated hiring a consultant to help me through this thing. You know, I’m a control freak and I was just going to ride it out however I could… I’m a pretty good judge of character. We hit it off right away. I liked everything he was saying. He’s a straight shooter. He is a no B.S. kind of guy and that’s exactly like me.”
First, Warren assisted Thomas in establishing whether or not the offer on the table represented the true value of the firm and then determining what risks might be present.
“We just started talking nuts and bolts… What’s the company’s value? What kind of state are the financials in? What kind of customer base do you have? What’s the order income?
So I showed that offer to Warren and he walked me through it, giving me the confidence to go with my gut and know right from wrong. I mean, there are like 4,000 different ways to value the company. He and sat down and he showed me the proper way to value it. It was really helpful just having an extra set of eyeballs. I knew it was a bad deal, but it was nice to have the reassurance from someone in Warren’s position to give me advice and back me up.”
From there, Warren consulted with Thomas on a bi-weekly basis, providing insight and assistance with due diligence, obtaining legal and financial counsel, and securing funding until the acquisition successfully closed.
A profitable transaction and on track for continued growth
Eight months later, the deal was closed, and Thomas was thrilled to finally be able to move forward as the sole owner and CEO of State Metal Hose.
“It took us a good solid eight months to close the deal. And Warren warned me from day one that it could take upwards of two years because these deals do often take that long. We did all the work. We came up with a value for the company, and all parties agreed.
I feel like getting it all done in eight months was a great success. I imagine I probably would’ve gotten the deal done without him, but with him, it made the experience a lot more tolerable. We accomplished what we wanted to accomplish a lot quicker, and without his guidance, I probably would’ve lost my sanity.”
And it wasn’t just the transaction that Thomas found valuable, but 15 Consulting’s ongoing advisement and mentorship as well.
“Warren is a bulldog. He is on you. He is a motivator. He will keep you motivated. And I love him for it. Warren will keep me grounded, keeps me motivated to get the task done. He really has been a mentor to me ever since I met him. Warren had a great part in saving my entire career. I already had one foot out the door. Like I said, having Warren there by my side… It was just awesome. Can’t say enough about him.”
Today, Thomas and State Metal Hose are on-track for continued revenue and profitability growth and a bright future in 2019 and beyond.
“It’s been going great. Day to day operations are stressful as ever, but it’s been going great. I wouldn’t have it any other way.
I’ve got A full-time welder working with me now. We are working with a group of salesmen out of Lancaster, Ohio and they’re trying to set up a network of distributors for us. In addition to working with those guys, we’re trying to expand out of state. We want to get down to Florida or Texas.
Last year we did a little over a million in sales. I think we’ll be at like 1.5 or 2 million in sales this year. So we’re looking strong. Business is steady. And with Warren’s guidance, the sky’s the limit.”
To other CEOs and Owners of industrial products firms
“For me, it’s really tough. I’m a hard-headed person. Like I told you in the beginning, I wouldn’t even think about finding someone to help me through this stuff. I would just put my nose to the grindstone and figure it out…
If I wouldn’t have found Warren, it would have taken probably double the amount of time and probably 10 times the amount of cost… But it was still tough for me because I’m just not necessarily the kind of person that would look for help or even ask for help.
I honestly would never even have thought about hiring a consultant, but it turns out Warren is the exact right type of person that could fit along with the type A personality like myself.
Even if you think you can do it on your own, it’s always nice to have an extra set of eyes or someone there to give you the confidence to pursue your idea or just stand your ground. Just having him support me with such passion just drove me even further to succeed in my goal.
If I’m feeling that way then there’s definitely someone else out there feeling the same way. I want to do it all on my own, I don’t want to ask anyone for help. No one has helped me so far, so I definitely don’t need anyone helping me going forward.
But that type of attitude, you know, that’s not going to get you anywhere. You’ve got to exploit all your resources. And sometimes you have to ask for help even though you don’t want to. And when someone is willing to help and offer a helping hand, you definitely are silly if you don’t accept it.
He’s a great guy and an honor to work with him and I would definitely recommend 15 Consulting to anyone going through what I went through or just needs any sort of help along the way.”
Think 15 Consulting could be a fit for your business?
If you’d like to explore whether there’s an opportunity to help your firm grow and increase profitability, let’s have a conversation and see where we go from there and determine if we’d be a fit.