Bob Bauer doesn’t like to waste time integrating new acquisitions. But he doesn’t let L.B. Foster Co. use a cookie cutter approach, either.
“There are aspects of the integration that we attempt to move forward with quickly, but that doesn’t mean we try to make everything about that company look like L.B. Foster in the early days, or even in the first year,” explains Bauer, president and CEO of the $600 million global manufacturer and distributor.
Bauer says the key is to swiftly integrate resources and support to make the business easier to manage, while moving slowly and carefully with the assets that provide value. “There are certain attributes with every business you acquire and certain strengths that they have that made them attractive,” he says. “You want to be careful not to ruin those.”
We spoke with Bauer about how L.B. Foster integrated three deals in three different ways.
A fairly quick integration
In our construction segment — our precast concrete business — we didn’t have an East Coast presence. We were good throughout the Midwest, all the way to the West Coast. Well, we acquired a business, so we were able to serve the East Coast.
We quickly merged that into our precast concrete division. We started to share things on new product lines as quickly as possible toallow us to penetrate the Northeast, or the whole East Coast market more successfully, where we had trouble competing. That was a very quick integration, and it was a business that got folded right into one of our divisions.
Moving more slowly
We have probably 200 service technicians in Europe, largely in the United Kingdom. Most of them are working on the London Underground expansion where we’re providing services that we’ve never provided before in the area of automation solutions for their transit systems. We acquired TEW Engineering Ltd., which had automation solutions expertise and a small service business. By bringing that together with what we already had in the U.K., we expanded that service operation. We also perform integration work now with the rest of the train management systems.
That one I’d call a partial integration. We still folded it into our European business. We’re now three years into it and it just continues to get more and more integrated. Some people wouldn’t describe three years as fast, right? Some people think fast integration, that’s a year. Smash it together. So, we’re on year three. There are some things they still do the way they’ve always done them, but they’re much closer from an organization and management standpoint to being part of our company.
Keeping it separate
Our measurements solutions business, Chemtec Energy Services, is based in Texas. This is a business that makes measurement systems for pipelines. We’ve always provided tubulars for pipelines, and we put the corrosive coatings on the pipes that go into the oil and gas pipelines, but we never measured what was going through those pipelines.
It was an entirely new product line — new market. It functions like a standalone division. In this particular case, we even allowed the brand to continue. While people know they’re an L.B. Foster company, people know them more by the brand that they’ve had since they were founded. The management team is the exact team that is in place today. There’s really no one different. We didn’t plug someone else in there. They’re serving the market the same way that they had served it before.
The bulk of our integration with them has been employee benefits, payroll systems and things like that — and the business system because they didn’t have one. But we didn’t change anything with regard to how they served the market. We also provided capital for a more accelerated growth plan. In fact, we’ve just funded a facility expansion that’s underway right now. We have the capital and the resources to provide for a facility expansion that’s going to allow them to grow in the manner that they may have struggled with previously.