On the prowl
By Nancy Byron
By Nancy Byron
A plaque hanging outside Randy Wilcox's modest office at Sarcom Inc. speaks volumes about his business philosophy.
Upon it is the inspirational speech by legendary football coach Vince Lombardi: "What it takes to be No. 1."
Wilcox's pursuit of this lofty goal has accelerated in the past 16 months at his Polaris-based computer reselling business, thanks to a string of multimillion-dollar competitor buyouts.
"It's much easier to buy than to build-at least in this industry," says Wilcox, whose 15-year-old company has more than doubled its sales, workforce and geographic reach since embarking on its recent acquisitions tear.
Craig Hoyt, president of Buckeye Boxes Inc. on Columbus' West Side, also sees the benefit in buying companies to help his business grow.
"When we bought Columbus Cello-Poly Corp., we went from 50 to 105 people overnight," Hoyt says. "That was a little interesting."
It was also a little profitable, he adds, declining to give specific earnings, but noting that the $2 million investment has more than paid for itself. That's because volume drives profits in Hoyt's industry, where warehouses full of expensive machinery can't afford to sit idle.
"So much of the costs are fixed," he says. "When we run more jobs, the return comes back exponentially."
That was the impetus behind Hoyt's decision to buy the Sandusky division of Mid-States Container Corp. last fall. Buckeye Boxes gained nearly 100 accounts and raised its revenues from $10 million to $13 million as a result of the $2 million deal while adding no new equipment and only increasing payroll by about 30 employees.
"In that case, we actually sold off a lot of equipment," Hoyt notes. "And with what we have now, we could as easily run $20 million."
Though both have seen tangible returns on their investments, Hoyt and Wilcox are quick to point out that acquiring competitors brings its own set of challenges.
"Buying the companies is easy," Wilcox says. "Integrating the companies is the hard part."
At Sarcom, that process starts with an orientation for all employees at the company being acquired.
"We take them through the same process new employees go through," Wilcox says. "We teach them how we do things. We hold meetings with them once a month and we survey customers every month to see how we're doing. We also see what they do well so we can incorporate that into the rest of the company rather than just imposing our ideas on them."
Wilcox is in the process of forming a four-person team dedicated solely to integrating the companies Sarcom purchases. That will become increasingly important as the company's acquisition activity steps up this year. At least four more purchases are expected in 1998, Wilcox says.
Sarcom, whose revenues lingered around $235 million at the end of 1996, is on target to gross upwards of $500 million this year. Acquisitions have also expanded the company's geographic reach from three to eight states in the same time period.
"It's a great way to grow a business, despite all the issues you run into," Wilcox says. "I think it's the best way if you want to grow rapidly."