Pat Covey, president and COO of U.S. operations at Davey Tree Expert Co., has seen the company’s revenue more than double and its geographic reach expand since coming aboard in 1991. The company owes much of that growth to an emphasis on acquisitions that has brought 30 companies under the Davey umbrella in the past decade. That’s a pretty incredible achievement, and somewhat surprising.
“If someone would have said five years ago that you would do five acquisitions in the first six months of the year, I think we would have looked around and said, ‘How are we going to do that?’” Covey says.
That sentiment can be traced back to early acquisitions that had been hit or miss for Davey, he says, which left the organization hesitant to aggressively pursue strategic growth. It’s strange, then, to consider that Covey would oversee two of the largest acquisitions in Davey history.
Fear of the unknown
When Davey’s chairman, president and CEO, Karl Warnke emphasized top line growth in 2008, a goal was set to achieve 40 percent of it through acquisitions. In order to see that directive through, the company had to find the source of its anxiety. Part of the issue was its organizational structure.
“I think we figured out a process, in a way, that said we need to have an acquisition team in place. We can’t just have this as being a job that we plug a person in if they have time. We needed a more devoted, consistent approach to the process. We needed to put people in the process that had been through it a few times and not just whoever was available,” Covey says.
The company’s confidence in the process was cemented after it completed two of the largest acquisitions in company history that year — one for $50 million and another for $45 million. That made smaller acquisitions less daunting.
“That repetitiveness, that ability to go through it a few times and learn from our mistakes has really helped us improve the process of bringing companies in and knowing where the hurdles are,” Covey says.
But there’s more to an acquisition than just the purchase. What happens after a sale, Covey found, is critical to its success.