When the family that owned Harken Inc., a manufacturer and marketer of sailboat hardware and accessories, started looking into the sale of their business, they explored several liquidity and exit options. Ultimately, they chose an employee buyout in the form of an ESOP. The two brothers who founded the company had built it from the ground up and always treated their employees like their extended family. An ESOP was a way to ensure those employees benefited from the sale.

“The Harken family have always been very humble and of service to the customers and to our employees,” says Bill Goggins, CEO of Harken. “And so after a lot of different options that came across the table over the years, this one just seemed the most natural and the best fit.”

Goggins says there were probably other liquidity events that could have been more attractive to the family, and certainly other interesting options had come across the table.

“All of that sounds good on paper, but when it comes back to taking the organization and getting us to where we want to go from where we've been, we feel like we can do a better job to be of service and take care of it ourselves,” he says. “So the ESOP just kind of became a natural conclusion after a lot of work of considering other options.”

Since the company became an ESOP it began using an acquisition strategy for growth more aggressively.

Goggins says the company enjoyed slow and steady organic growth over time, and has made key acquisitions that have helped build the business. But now, the company has found that true accretive acquisitions really can amplify a strong company and make it even stronger.

The recent growth through acquisition came from good timing. The company bought a big distributor in Holland, Goggins says, that was looking for succession plans that bolted on nicely and was a good margin play. Two other acquisitions were made last year through a diversification strategy. It bought a company in Chicago called Elevated Safety and then we bought another company in Sandpoint, Idaho, known as Cascade Rescue.

Goggins, talking at the Milwaukee Smart Business Dealmakers Conference, offered more details on the company’s acquisition history and strategy, as well as how they’ve funded transactions. Hit play on the video above to catch the full conversation.