Acquisition Spree: Advanced Business Methods Adds 4 Businesses in Less Than a Year · Fargo INC!
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Acquisition Spree: Advanced Business Methods Adds 4 Businesses in Less Than a Year
Advanced Business Methods (ABM) has been a strong business in this region for over five decades. However, like many other businesses in the printer and copier sector, ABM has encountered a stagnation
In shortAdvanced Business Methods (ABM) has been a strong business in this region for over five decades. However, like many other businesses in the printer and copier sector, ABM has encountered a stagnation
3 things to know
1Advanced Business Methods (ABM) has been a strong business in this region for over five decades.
2However, like many other businesses in the printer and copier sector, ABM has encountered a stagnation in growth as the demand has plateaued.
3Rather than sitting back and staying comfortable, ABM has adopted an aggressive expansion strategy, acquiring four businesses in less than a year.
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Advanced Business Methods (ABM) has been a strong business in this region for over five decades. However, like many other businesses in the printer and copier sector, ABM has encountered a stagnation in growth as the demand has plateaued. Rather than sitting back and staying comfortable, ABM has adopted an aggressive expansion strategy, acquiring four businesses in less than a year. This bold move is designed to diversify its service offerings and rejuvenate its core operations by securing competitive advantages in an increasingly complex industry landscape.
To learn more about these bold moves, we interviewed President Jeff Ellingson, Director of Service Wes Henry, and Vice President Ben Nelson.
Acquiring True It
Perhaps unsurprisingly, ABM’s first acquisition was arguably its most important—its acquisition of TrueIT on July 11, 2023. Before the acquisition, ABM only had printer copier solutions while a growing number of printer copier companies were also getting into managed IT services. So, rather than try to start from scratch, they added 16 employees and a topnotch IT department by acquiring TrueIT.
“To be honest, we’ve been looking at doing this for 12- plus years,” Nelson said. “Between these two industries, you’re really dealing with a lot of the same businesses and people. It just makes sense to have both. These days, customers are looking to have one solution provider for all of their needs.”
“Now, we’re able to provide a total offering to our clients,” Ellingson said.
Patience is a Virtue
“We waited for so long because we were doing a lot of market research and IT is a lot more competitive,” Nelson said. “And, to be honest, we had been doing what we did well at ABM for 53 years and we just didn’t have the need to get into something we weren’t familiar with—that’s why we teamed up with TrueIT. It made a lot more sense to acquire a company that already had a customer base as opposed to trying to start from scratch.”
Did You Know?
ABM is an ESOP. According to their leadership team, this has helped them complete this recent string of acquisitions.
“When these owners are ready to sell, they usually don’t want to sell to a big corporation,” Nelson said. “They want to give back to their employees and working with us allows them to do that without having to set up an ESOP themselves, which can be expensive.”
The Right Fit
Wes Henry
“Zac Paulson (former CEO of TrueIT and current director of product and strategy at ABM) and Wes are just amazing people and we knew they provided a great level of service,” Ellingson said. “Their core services also matched up with what we were expecting from an IT company, and our visions for the future matched. So we know we have the right fit. It’s just about trying to get the two cultures to mix.”
Now, ABM is able to offer the same IT services that TrueIT did which include a Core Contract, a Foundation Contract, and a Security Contract. (Which ABM has renamed to True Secure, True Managed, and True Support) And, they’ve delivered those services well enough to keep most of their clients for a long time.
“It’s simple, it’s easy, and clients understand what they are getting,” Nelson said. “We’ve had some crossover in terms of having some of the same clients over the years and we’ve heard nothing but good things about TrueIT.”
Integration Challenges
“It’s a challenge. I think it would be less of a challenge if we were all able to be in the same office right now,” Ellingson said. “We’ve had some gatherings to try to integrate our team, but it’s definitely a challenge. I don’t have a magic bullet. It’ll help once we can get under the same roof.” “The tenure of ABM’s staff is very long. They have a lot of people that have been there for a long time,” Nelson said. “Our average tenure is about 17 years whereas TrueIT’s tenure is about 3 years.” “One of the things that made our businesses a good fit for each other as companies, but also makes it a little bit harder for the cultures to mix, is the fact that both of our organizations were very tight-knit,” Henry said. “That’s great, but when we get together, it also makes it harder to have people mingle with new people.”
Cross Department Collaboration
“Another thing we have done to try and get everybody working together is cross-department meetings. Our sales reps within the two divisions meet on a regular basis. It’s the same with our service reps,” Ellingson said. “We’re starting to find areas where we can each take advantage of each other’s services,” Nelson said. “We’re seeing the help desk teams helping each other. We’re seeing sales teams booking appointments for each other. It has come a long way in a short amount of time.”
Establishing Trust
“After we made the announcement, one of the first things we did was sit down with every individual employee one-on-one,” Nelson said. “We did that so we could let them know what we were doing here and so that we could have a chance to listen to them and just try to understand them and figure out what we could do to help them with the transition.”
“We really also wanted to just get to know people,” Ellingson said. “It’s about building relationships and building trust.”
The gatherings have included a team barbecue, team breakfasts, a trip to Suite Shots, and a number of other random events help the team bond. This is a crucial step for building team chemistry
Handling Logistics
“Right off the bat, there was a plan to integrate the service management and accounting systems. It’s really important for all of the billing to roll up into one system for centralized financials,” Ellingson said. “This is also important because we want to make sure that customers feel like they’re working with one company. We don’t want them getting five different bills. Getting all of that rolled together is a big undertaking. After that, it was really important for us to get everything into one phone system and one email system.”
“We’re also rolling out Microsoft Teams throughout the organization to have more instant communication,” Henry said.
We’re starting to find areas where we can each take advantage of each other’s services.” Ben Nelson
Acquiring Millennium Systems Technology Inc.
Pior to September 1 2023, ABM already had a presence in Grand Forks, ND, but they didn’t have the IT presence they wanted to. So, they acquired Millennium Systems Technology Inc.
Millenium Systems Technology Inc. was a single-employee business owned by Terry Dvorak who, after the purchase, now works as a Network Administrator for ABM.
“Pretty much all of his IT customers were also copier customers of ours,” Ellingson said.
“This acquisition really made perfect sense for both sides,” Nelson said. “Terry is at an age where he wants to take vacations. He wants to retire at some point. With ABM, he found an opportunity to move towards that. He took his first vacation a couple of months ago.”
“This wasn’t a huge acquisition,” Nelson said. “But it was big enough where it just made sense.”
The Integration Team
Once a week, ABM holds integration team meetings where managers from every department sit down and collaborate on how to move forward.
“One of the great things about these meetings is that it’s not just a top-down structure,” Henry said. “There is a lot of bottom-up feedback that gets brought into those meetings. If there’s a change we made that isn’t working for the people having to deal with that process, there is a channel for that feedback to reach our integration team to figure out a solution.”
Did You Know?
In 2021, global mergers and acquisitions surpassed $5 trillion globally
Challenges
“The biggest challenge has been integrating Terry’s customers into the services that we offer,” Nelson said. “Being a single-employee business, there’s only so much product vetting Terry was able to do and only so much time he had to devote to keeping up with things going on in the industry. We have a much larger array of products to deliver so it has been a process getting his customers over to those services that we offer.”
“There was some pushback from his clients,” Henry said. “It wasn’t anything too bad. There was just some concern because they were used to always working with the same person. He knew them really well and they were concerned about all of a sudden having to work with a big company that wouldn’t care about them. I think we’ve gotten past those concerns though.”
“Along those same lines, we had the issue of getting customers to operate using a ticketing system,” Nelson said. “They were used to calling Terry directly, but he can’t take those vacations if people can reach him that way.”
Did You Know?
In 2021, global mergers and acquisitions surpassed $5 trillion globally.
Amaris – ABM utilized a consulting company called Amaris, which helped them learn the ins and outs of acquisitions.
A strong CPA or accounting firm
A good attorney
Acquiring Central Business Systems
Recently, there have been a number of competitors that have moved into the metro area, but ABM is fighting back by securing a stronghold on the state. Their acquisition of Central Business Systems in Jamestown, ND, which added seven employees to their roster, only strengthened their grip.
Securing the Homeland
“This was a very strategic type acquisition for us,” Ellingson said. “We’ve been strong in the whole state of North Dakota for years, but Central Business Systems has had a really strong hold on the central part of the state around Jamestown. They have their local customers. So, it helped us get that part of the state we didn’t really have and the owner was just ready to sell. This acquisition keeps our competitors from moving further into the state. We want to control the state.”
Keeping the Name
When acquiring businesses in smaller communities, ABM believes it is important to keep the name that was in place.
Expanded Offerings
According to the ABM leadership team, an important reason for these acquisitions is to diversify. They realize that print is not going to boom anytime soon. It is maintaining, but they want to position their company for a healthy future. “They sell different machines that we don’t have. They sell Kyocera, which we were looking at getting into,” Ellingson said. “Beyond offering just the copier and printer solutions, they also sell computers. They’re basically like the Best Buy or Radio Shack in Jamestown. So, if someone needs a computer, a printer, a cable, or anything like that, they go to Central Business Systems. They also have a big document shredding truck. So, this acquisition allowed us to add a couple of things to our portfolio that we didn’t have before.”
Keeping Leadership in Place
Throughout all of these acquisitions, ABM has kept the employees on staff that were in place at the time of the acquisition. According to them, this is a source of strength.
“When you are trying to learn how to run a business that you haven’t been involved in before, like document shredding, it takes about a year to have a real understanding of the market,” Ellingson said. “That’s why we’ve kept the management team in place at Central Business Systems. They have the answers that we don’t have. We try to pick their brains as much as we can.”
“I’ve been involved with mergers and acquisitions before where owners will come in and think that they already know better how to run that organization,” Henry said. “So they come in and start changing things right away on day one. That has a lot of negative consequences. In the end, you might get to a good place, but doing it this way has a demoralizing effect on all the staff because they feel like the rug’s getting pulled out from under them. The decisions being made also often don’t have enough context behind them to be the right decisions. ABM has tried to keep things working the way they are working while we find out what is good and what is bad.”
Acquiring The Office Shop
Scott and Jodi Johnson sold The Office Shop of Brainerd, MN, and Aitkin, MN, after 41 years of ownership to ABM in order to work more on a side business that is a passion of theirs.
For ABM, the aggressive acquisition which added another 17 employees to their team, is one full of potential.
Playing Ball
“We’re starting to play offense a little bit now,” Ellingson said. “There have been a number of companies that have moved into our backyard from Minnesota. Now, we’re moving into their backyard and playing ball.”
Tons of Potential
“There is a ton of potential with this location,” Ellingson said. “All of their business right now has come from someone calling them or walking in the door.”
Diversification
“In addition to copiers and printers, The Office Shop sold office furniture and supplies,” Ellingson said. “We are going to keep all of that intact.”
Keeping the Name
“They’re really locally embedded into the communities in that area,” Ellingson said. “They’re really old school in that way. They still fill delivery trucks with paper and supplies every day and go out to all of these little communities in the area. It’s an interesting way to compete against ecommerce. When you order a case of paper with them, they bring in the case and set it by the copier, not just drop it at the front door. It was also really important to the community and to the previous owners that the company stay locally owned and since ABM is an employee-owned company, we were able to offer that.”
Acquiring More?
Stay Tuned
Four acquisitions in less than a year is no small task, but from my conversations with the ABM leadership team, I wouldn’t be surprised if there’s more to come.
Editor of Fargo INC! — covering the founders, companies, and ideas shaping business in Fargo-Moorhead. Eleven years in, still no opinions, no politics, all business.
