Chris Haas spent a decade growing All Pro Freight Systems Inc. at a “grinding” pace until he realized that growth by acquisition could multiply his capacity more quickly.
Haas targeted a couple local transportation companies similar to Avon-based All Pro whose owners were nearing retirement. He made his first acquisition in 1998, followed by a second in 2000 — catapulting his business to new levels of growth.
“Acquisitions can be a fluid way to add $10-15 million to your top line,” says Haas, president and CEO. “You could go out and get a customer like PepsiCo and add $15-20 million in logistics business, but those are few and far between and not easy to come by. With an acquisition, the growth comes to you.”
In 2012, All Pro acquired an Elyria-based trucking company that specialized in hazardous material transport because Haas needed hazmat-endorsed drivers to meet customers’ increasing demands. The company is approaching $100 million in revenue, has 225 employees and runs about a million square feet of warehouse and distribution space.
Currently eyeing his next acquisition, Haas shares his strategies for making every M&A transaction a win-win.
What was the most important lesson you learned from your first acquisition?
You definitely have to check your ego at the door, and don’t come on too strong when you’re dealing with people. I set up a couple lunches (with the owner of the company I was targeting for acquisition) to lay the groundwork that we were interested in a merger. In order to make a deal work, you can’t be the strong arm. You’ve got to show that you really care about the people and the culture of their company.
I found out, early on, that a deal has to be good for both people. It’s not like buying a car or a house, where you just try to get it for the cheapest price. You’ve got to make sure that there’s enough incentive in it for them.
In our case, we were young and growing, and with the help of their customers and employees, we could accelerate our growth and provide more royalty back to their owners. If they could provide 10 truckloads a day for their customers, we could provide 100, and because of that, we were able to explode the business. It was a win-win for everybody.
What’s your key to a successful acquisition?
The potential for growth. We want to take that company and continue to grow it at the pace we’re growing ours. Typically, we’ve been the bigger company with more assets and more drivers, so we can usually accelerate the growth of the business we acquire. With that comes economy of scale, so not only do you blow up the sales growth of their company, but you cut back on redundancies, and those dollars go right to the bottom line.
What are some oversights that could quickly derail a transaction?
Assuming too much. I think that truthfulness in an acquisition is probably the most important thing. I try to be very upfront and straightforward with people we’re acquiring about what we need and what we don’t need, so before the deal’s done, all those pieces are in place.
In an acquisition, the culture of the company could mean way more to the deal than the dollars and cents, especially if you’re in growth mode and you need people to continue the growth. If their culture lines up with what we’re trying to do, it’s a lot easier. But if it doesn’t, you’ve got to draw the line.
Sometimes the best deal is the one you don’t make. So many people let their ego get in the way — they want this, they want that — and if things don’t line up, they try to force it and it creates a lot of problems. Our acquisitions are good for both sides, long-term, and that makes everybody happy.
How to reach:All Pro Freight Systems Inc., http://allprofreight.com/