Mike and Gayle Rusk have built their reputation at Ohio Basement Systems on providing a solid foundation for their clients. Mike is confident that the sale of the company to Virginia Beach-based Groundworks will deliver an equally strong support structure for the future of the business he and his wife started in 1998.
The deal represents the fourth acquisition this year and 14th in the last three years for Groundworks, the nation’s largest foundation services company.
“We've grown quite a bit over the last 20 years,” Rusk says. “But one of the things that got me thinking was where are we going to go from here? What kind of opportunities am I going to be able to provide for our people for the next five, 10, 15 or 20 years?”
Rusk found a match for what he was looking for at Groundworks.
The team of nearly 100 employees from OBS will join the Groundworks family and the Ohio Basement Systems brand will continue to do business under that name. Rusk will join the Groundworks advisory board and retain an ownership stake in the business.
Smart Business Dealmakers caught up with Rusk and Groundworks CMO Cary McGuckin to learn more about how this deal came together.
Find common ground
Rusk had informal conversations with a number of potential deal partners over the years.
“There were two or three that were considering putting together a national-type brand,” Rusk says. “But I wasn't really convinced that they had the resources or the background to actually pull it off.”
Through a relationship he had built with Groundworks CEO Matt Malone, Rusk took note of Malone’s ability to execute on deals with companies like OBS.
“He has the resources to be able to take these companies, and now take my company, to a higher level,” Rusk says. “It’s going to allow us to grow into other states and other areas around the country. So just getting back together with him and hearing his story and his goals and what he was looking to try to accomplish made me think that this might be a good avenue for us.”
The ability to find common ground at a deeper level is critical when talking to potential buyers of your business.
“When you sit down with somebody to have your first or second conversation about where this might lead, I think it's really important to talk about what your beliefs and values are,” Rusk says. “You can talk about it, but you also need to be able to see it. I was fortunate in that I was able to not only hear it, but I was able to see it as well.
Rusk admits he may have underestimated the amount of work involved when you sell your business.
“If you're planning on approaching somebody to sell your business or to merge with another company, there's a lot of due diligence that needs to be done behind the scenes before that can happen,” Rusk says. “You need to be ready for that and you need to be organized. I know that if I had to go through it all again, I would have been much better prepared. This all happened a little quickly for me.”
Groundworks has focused its acquisition strategy on identifying companies that are market leaders with strong management teams, McGuckin says. The company now has about 1,350 employees through its 11 brands across the U.S.
“From an M&A standpoint, we continue to learn each time as we go through this process,” he says. “What is exciting to me is that this is not a one-way type of thing. There's a lot of bi-directional learning that happens. We take from each of these businesses and we learn things that they do exceptionally well. Then we're able to take that and share that with our other brands so that collectively, all of us can continue to get better.”
Successful transactions are typically the result of a process that puts the company being sold in front of a targeted pool of potential buyers.
“There's a lot you can do ahead of time to be prepared, especially financially, to make it as easy as possible for the person that might be acquiring or partnering with the company,” Rusk says. “There's a way to make that much easier and for it to go much more smoothly. In the end, it'll make the company more valuable as well.”
Creating more value is about more than just generating additional revenue, Rusk says.
“People often look at mergers and acquisitions as being all about the money,” he says. “It has to be about more than that. It has to be about the customer and the employees and the money will come later. If you get together with a partner that has that same value system, it's going to make it a lot easier for you to be comfortable with your decision. I know that's what made me comfortable with this one.”