On paper, Oleg Firer literally embodies the American dream. Moving to Brooklyn, N.Y., from the Soviet Union at the age of 12, he entered into business without a college degree and rose quickly to become the VP of a publicly traded company by his late 20s.
In 2002, Firer taught himself the payment-processing business — which would become his career — from the ground up and eventually partnered with private equity group Star Capital to start his own payments business in 2007.
With the help of his partners, Firer executed a roll-up strategy that included eight acquisitions between 2008 and 2010, combining the entities into a one payment-processing company — Unified Payments LLC. Today, Unified Payments has grown to approximately 50 employees and $59.5 million in revenue. And with a three-year growth rate of 23,646.3 percent, it soon shot to No. 1 on the 2012 Inc. 500 list of the fastest-growing companies.
“M&A is my background,” says Firer, co-founder and executive chairman, Unified Payments, which now processes about $10 billion worth of transactions for 100,000 merchants a year. “I like to find the diamonds in the rough and make them into diamonds. And that’s what we’ve done.”
Firer’s leadership has been critical in helping the company overcome challenges of integrating eight companies while managing fast growth and staying innovative in a competitive industry.
Smart Business spoke with the Firer to find out the keys to his M&A success and keeping Unified Payments on top.
SB: How did you choose which companies to target as part of the acquisition and roll-up strategy?
OF: The companies that we acquired had something unique about them. Being established is one thing — but they all had some sort of issues. We did a lot of distressed equity buys where they were either overleveraged or they were growing too fast and they couldn’t keep up with it or they had shareholder feuds or so on. Obviously, we looked at dozens of companies and we identified the eight companies that we liked the most, and we executed.
We also invested in human capital. Each one of these eight companies — besides having potential to grow and having a sales engine — had human capital behind them that we believed in. We don’t have eight different divisional presidents. We consolidated, and there were three people that I believed were the strong sales leaders to take this business to the next level. We bet on them. So it was not just acquiring for the core assets and growth opportunity; it was also acquiring them for human capital that knows this industry.
SB: What was your timeline for the acquisition strategy?
OF: The first acquisition that we did was the most expensive and the biggest. We executed the first acquisition in 2008 as a platform buy to do the add-ons that we did at later points. When we did the platform buy, it had a lot of human capital already behind it. Most of it needed to be restructured.
We bet on the sales leadership, but operationally, we had to break down a lot of departments in order to make this a success. That took awhile. And obviously, from the add-ons that we did, we moved some people around, and we hired some new people.
SB: When did you start integrating the businesses?
OF: We didn’t wait for the eight to complete. From the first platform buy, we started right away working on operations, restructuring the operations and making the operations stable. No matter what size of payment-processing provider that you are, you still need a core engine. For us, it was building an engine that’s scalable and having the outsourced pieces that we need in place to have 24/7 support and so on. It took a year to really build proper structure, and then when we started executing on acquisitions, it was about integrating them in the structure.
SB: When you are completing multiple acquisitions, how do you integrate them into your company in a way that doesn’t overwhelm your business infrastructure?
OF: It was easier with the add-ons because when you have an add-on, you strip away (general and administrative expenses) G&A and you integrate the asset into the engine if you see any new human capital that is an asset to the company. Then the rest we would strip down.
So the core support functions like customer support and technical support we would keep in the core engine. If tomorrow I’m presented with an opportunity to buy a payment-processing provider, I would let all the customer support and technical support resources go because I already have them in my core.
It’s like a puzzle. You see the missing pieces and you want to fill those pieces. Identifying the missing pieces and bringing those pieces in became easier after the first acquisition because we see that we’re lacking in a niche vertical. So now we know that the next acquisition that we do is going to be a new vertical. It has to have something special.
SB: How has the recession impacted the growth of your business?
OF: After we acquired the eight different companies, we consolidated, created this engine and decided to keep them in an organic growth strategy. We have been growing for the past two years organically from redoing these engines that we acquired.
This industry is very competitive. And with the recession the biggest thing that keeps me awake at night is that there are more businesses that go out of business. So it’s losing merchants and keeping up with attrition and the churn and providing outstanding service to the merchants that process with you — and providing them with innovative products so that they don’t go to the competition.
SB: How can you manage risk when you have customers who are struggling?
OF: It’s pretty much keeping your ear to the ground and working with partnerships. ... When MasterCard launched a PayPass program, which is a ‘contactless’ card, we were the first organization to launch it for them in New York because we understand what it takes to roll out technologies. By working with the industry’s innovative associations, such as Visa, MasterCard and Discover, and working with technological partners that we have, it makes us stand up to the competition.
SB: How do you make sure that you’re not growing too quickly?
OF: You want to have gradual growth. Pulling in the reins on a monthly basis and slowing down the growth is really the most challenging. Once you let marketing loose, it’s hard to pull in some marketing areas. Growing too fast can permanently damage the company. So it’s about growing methodically, managing within the budget.
With us, there is an acquisition cost to every merchant that we bring in. So if I want to pull in the reins, I just shrink the budget for that month. It’s growing at the pace where the business can afford to fund marketing and then fund G&A.
SB: Any lessons learned the hard way?
OF: If you’re a business leader and you’re an operator, choose the right capital partner that believes in you and that will give you an ability to take this to the next level. I had to go to a few capital partners, and it was challenging to find a capital partner midtransaction. Adding another capital partner during a transaction was even more challenging. So the challenge I had was going through several capital partners; when you’re already committed, you can’t go back.
Get a firm commitment and make sure that the partner that you choose believes in the overall picture and not just a piece of it. Believing in just a piece of it could cause you to run into to problems later in the game.
SB: What are the main lessons have you learned from your M&A experience?
OF: Everything takes longer and it costs more. So you need to be very conservative in your estimates and be very conservative in your projections. Be very cognizant of time. Underpromise and overdeliver — that’s my model.
SB: What advice would you have for another business executing an acquisition?
OF: I had to go through a lot of companies to really believe in the eight that we did. And I mostly believed in them because of the people. It all starts at the top. If you have the right people at the top, if you have the right business leaders, it becomes very easy to do a transaction. If you don’t have the right leadership and business leaders that you rely on, everything else can crumble.
And then, obviously, it’s always challenging to find good people for any business. But if you find somebody that you believe in and that has the track record, don’t let the person go. ?
How to reach: Unified Payments LLC, (877) 621-9110 or www.unifiedpayments.com
The Firer File
Co-founder and executive chairman
Unified Payments LLC
Born: Soviet Union
Education: New York Technical College
Management style: There are two styles to me. First of all, I have an open door policy. I speak to every employee in the company and everybody has direct access to me. I meet with my employees all the time. And I don’t consider them employees; I consider them partners because we have a common goal, and we need to work toward it. And I think outside the box. There’s no strategy that I would not look at. There’s no opportunity that I would not look at.
What you do for fun?
Jet skiing, boating
Who have you never met but would you like to have dinner with?
Warren Buffet, to get an insight on what it takes to be the most successful investor of the 20th century and understand what it takes to spot the hidden jewel in the companies he invests in.
What would you be doing if not your current job?
I would be a politician.
How do you regroup on a tough day?
I spend time with my kids.
What destination would you still like to visit?
What’s next for Unified Payments?
Every month and every day we raise the bar because of the fact we have to grow, and I’m not satisfied with the growth that we have. So we still want to grow a bit more. We still have some internal restructuring that I’m working on, and as I execute a little bit more organic growth and do a little bit more acquisition, one day who knows? I might exit. So it’s making the business big enough to be palatable to somebody smarter than I am.
2013 CIN Pillar
Pillar Award for Community Service Finalist
vice president of customer care
Victoria’s Secret Direct
(614) 415-7000 | www.victoriassecret.com
Among its many community activities, Victoria’s Secret Direct joined with the Children’s Hunger Alliance to present the first Kids Day Backpack Bash for more than 500 children at Montgomery County Fairgrounds Historic Roundhouse in July 2012. The Kids Day event promoted the USDA Child and Adult Food Program, which provides hot meals and snacks for children ages 5 to 18 at approved after-school program sites during the school year.
In addition, Victoria’s Secret Direct has supported the Children’s Hunger Alliance’s Taste to Remember event since 2006 and contributed almost $34,000 to the event. Other corporate contributions include $95,000 in support of the Healthy Kids, Healthy Schools and Healthy Kids, Healthy Communities initiatives and the Children’s Hunger Alliance’s annual Menu of Hope event.
Each year, Victoria’s Secret Direct hosts Community Cares Week in Dayton. Community Cares Week supports multiple nonprofit organizations in the community with community service hours.
Melanie Rose-Billhardt, vice president of customer care for Victoria’s Secret Direct, has served as chair of the Children’s Hunger Alliance’s Southwest Ohio Regional Board, serving Cincinnati, Dayton and surrounding communities for five years. She also serves on the agency’s governing board.
Rose-Billhardt has worked to raise awareness of the Children’s Hunger Alliance by securing various marketing materials for board members to distribute when introducing the agency to corporate and community members.
She has contributed her time, talent and personal resources to advance the Children’s Hunger Alliance’s mission and vision, and she was instrumental in securing additional corporate funds to support the Kids Day 2012 Backpack Bash.
Pillar Award for Community Service Finalist
Union Savings Bank and Guardian Savings Bank
(513) 247-0300 | www.usavingsbank.com, www.guardiansavingsbank.com
The philosophy at Union Savings Bank and Guardian Savings Bank is straightforward: They get involved in community activities because it’s the right thing to do.
Led by CEO Louis Beck, the company’s service projects are employee-driven. Each month, the company holds an employee action committee meeting open to all employees. Anyone in the company can come and present a project or an organization close to his or her heart that he or she wants the banks to support.
Beck leads the company’s community giving. He is the driving force and sets a strong example through action. He never misses a community action committee meeting and constantly supports, encourages and motivates everyone around him.
The impact that Union Savings Bank and Guardian Savings Bank has on the community is far-reaching. Each year on Thanksgiving, the employees and families of Union and Guardian get together in the morning and carry out a major holiday initiative. They meet at the Kroger grocery store on Ferguson Road, load their cars and then deliver Thanksgiving dinners to needy families all over Cincinnati. Last year, they gave dinners to more than 900 families.
In addition, if not for Union and Guardian’s giving spirit, students at Ethel M. Taylor Academy, Lincoln Heights School and South Avondale School would not have the wealth of school supplies and backpacks the company provides; and the residents at Tender Mercies, a shelter for mentally ill homeless people, would not have Christmas presents and dinners provided by the company’s workers.
Nonprofit Board Executive of the Year Award
Ellen M. Katz
president and CEO
The Children’s Home of Cincinnati
www.thechildrenshomecinti.org | (513) 272-2800
Ellen Katz has been president and CEO of The Children’s Home since 2005, although she has worked with the agency since 1990. During this time, the agency has responded and adapted to the changing needs of children and families in our community and has received local and national recognition for quality service.
Today, Katz is focused on developing the vision and strategy to ensure long-term growth and success for The Children’s Home. She has grown the agency from 189 employees in 2005 to 270 today. That staff runs 25 programs and related activities serving 6,000 clients annually, up from 1,200 clients in 2005.
Under Katz’s leadership The Children’s Home of Cincinnati has seen its assets and endowment grow from $70 million to more than $81 million and its budget increase from $13 million to $19 million. Her work has impacted the community, helping thousands of children overcome significant behavioral and educational challenges.
Katz’s leadership has propelled The Children’s Home into a flexible, innovative organization that consistently responds to the ever-changing needs of vulnerable children and their families. She utilizes unique management techniques and processes, effectively harnessing for-profit business to help the 148-year-old agency adapt to changing economic circumstances.
These kinds of collaborations have resulted in higher quality and an increased impact of services, greater presence in the community and in increase in funding opportunities, as well as decreased duplication of community services and a better capacity to serve children with the greatest needs.
Pillar Award Finalist
founder and CEO
Systems Evolution Inc.
(513) 459-1992 | www.sysev.com
Systems Evolution Inc. is a close-knit company, which is why its employees were hit hard when a tragic accident changed the life of one their own. After a 2005 bicycle accident took the life of 10-year old Josh Helfrich, the son of SEI consultant Ann Helfrich, the consulting firm channeled the support and compassion of its team to found Josh Cares.
As founder and CEO of SEI, Dan Pierce has played a lead role in creating the charity and making it a focus of SEI. Several months after Josh’s accident, Dan and his wife reached out to Ann and her family with the idea to create a philanthropic initiative in Josh’s memory. The result was Josh Cares, a program within Cincinnati Children’s Hospital Medical Center.
The motivation behind Josh Cares is that no child should suffer through a serious illness and lengthy hospitalization without ongoing presence and support of a family member. Josh Cares provides these children with surrogate companions — Josh Cares Child Life Specialists — who can offer the love and support and help them connect them with classmates, friends and family who cannot be there.
Today, SEI employees lend their time, talents and financial support to Josh Cares. SEI individual employees have donated nearly $62,000 of their own money to Josh Cares to date. As a company, SEI has also led corporate donations to the charity since its inception, contributing nearly $50,000 in sponsorship support and employee giving matches. And through the volunteer efforts of SEI employees, Josh Cares has been able to raise an annual budget of $335,000 to support many children and their families in their time of crisis.
2013 CIN Pillar
Pillar Award for Community Service Finalist
Larry A. Sheakley
(800) 877-2053 | www.sheakley.com
Larry A. Sheakley, owner and CEO of the business services company Sheakley, leads by example. Dedicating a phenomenal amount of time and energy to community service initiatives and nonprofit work, Sheakley’s altruistic actions motivate his employees to involve themselves in volunteer efforts.
Currently, Sheakley serves on the board for the Cincinnati Music Hall Revitalization Committee and is actively involved with both the Oversight Committee of the Partnership for a Greater Cincinnati and the Lighthouse Youth Organization.
He has been the chairman of the Cincinnati Art Museum, co-chair of the Cincinnati Opera Capital Campaign, vice chair of the Taft Museum of Art, a board member of the Cincinnati Fine Arts Fund and a member of the Cincinnati Ballet Building Committee. He has held the positions of president of The Leukemia & Lymphoma Society of America local chapter and co-chair of Team in Training and Leadership Campaign board member for United Way.
Additionally, Sheakley has worked in the past to benefit Ohio employers as the president of the National Association of Unemployment Tax Organizations and as a member of the Governor’s Task Force on Employment Services in Ohio.
Sheakley, which provides business services such as payroll, human resources and workers’ compensation, was founded in 1963 as Raymond Sheakley & Associates. Purchased in 1980 by Larry A. Sheakley as a business with less than $1 million in sales and concentration in only one area, Sheakley has grown into a successful company of more than 2,000 employees with headquarters in Cincinnati and a total of nine regional offices in Ohio, Iowa and Tennessee.
Pillar Award Finalist
president and CEO
(800) 860-9495 | www.powernetglobal.com
PowerNet Global understands the best way to contribute to its local communities is to offer its employees the opportunity to volunteer their time.
To encourage community involvement, the communications provider gives charitable paid time off, which allows employees to appropriate up to eight hours of their paid time per calendar year to any charity of their choice.
Some organizations that PowerNet employees support include The Leukemia & Lymphoma Society, the City Gospel mission, The Healing Center and Transformation Cincinnati & Northern Kentucky.
In addition, the company takes care of its own. PowerNet organized donations and support for an employee whose teenage daughter was diagnosed with ovarian cancer. Employees raised money to purchase an iPad so she could remain connected to family and friends and be entertained while at the hospital.
The company also took a picture of employees holding big letters that spelled, “Get well soon, Julia!” and sent it to the family.
PowerNet also has the PowerNet Global Social Committee, which prepares a variety of events throughout the year to provide employees with opportunities for fun and fellowship. It hosts fundraisers to help support local charities and offers opportunities for employees to partake in company fellowship.
For example, it has hosted yard sales with proceeds going to the Susan G. Komen Foundation for Breast Cancer, a “Biggest Loser” event with half of the proceeds going to benefit the Fairfield Food Pantry and a school supply drive for local students.
Pillar Award Finalist
(800) 381-0053 | www.paycor.com
One of Paycor Inc.’s most important guiding principles is “taking care of each other.”
The payroll processing company created its own community service program, Community Partners, to coincide with the principle. The grassroots program encourages employees to take care of the Greater Cincinnati community.
The effort began in March 2010 as a way for Paycor associates to share their community service passions with their co-workers, raise awareness for charitable events and causes that are important to them and gain support for their participation in community activities. It is not funded by corporate financial contributions; associates give their own time and resources.
Since the program started, Paycor associates have led a total of 152 events, filling 3,289 volunteer opportunities. In 2012 alone, Paycor associates led 41 events, filling 909 volunteer opportunities.
Paycor supports Community Partners with an intranet page that publicizes the events, allowing associates to connect with event leaders and enabling them to share their successes by posting event recaps and photos.
Paycor also motivates participation by giving all associates a Community Partners certificate they use to collect stickers for each event they attend. Once an associate reaches 10 events, he or she is rewarded with a T-shirt or other item.
Paycor has worked with a number of charitable organizations, including the Cystic Fibrosis Foundation, Junior Achievement, March of Dimes and American Cancer Society, to name a few, and plans to continue growing and expanding in years to come.
Pillar Award Finalist
president and CEO
Messer Construction Co.
(513) 242-1541| www.messer.com
Messer Construction Co. CEO Tom Keckeis believes in leading by example.
Keckeis has always recognized that giving back to the community is important and that it is essential to take part in the community where one lives and works.
Throughout his career, Keckeis has been involved in a number of nonprofit organizations. He is a current board member and past chair of the Greater Cincinnati YMCA and serves on the board for Cincinnati’s Playhouse in the Park, where he leads the Corporate Giving Committee.
While Keckeis enjoys all aspects of community service, he says his real strength is in construction, and this is where he can make the most impact.
For nine years, Keckeis was involved with People Working Cooperatively, an organization that helps the elderly stay in their homes by assisting them with necessary repairs. He used his knowledge and experience in renovations to make a substantial impact and even recruited his children to help.
Through his example, Keckeis has led Messer to be a good neighbor, and the company’s employees have supported their communities with time, energy and financial resources.
In the past 21 years, Messer, on behalf of its employee-owners, has invested more than $12 million to make its communities better places to live, work and raise families.
In 2011, Messer and its more than 800 employees invested more than $1.5 million in community organizations across the nine regions in which it builds. Included in that investment are three $25,000 grants awarded by the Messer Foundation to employee-recommended community organizations.
CIN Pillar Award
KDM P.O.P. Solutions Group
(513) 769-3500 | www.kdmpop.com
KDM P.O.P. Solutions Group, led by President Bob Kissel, operates a committee to ensure a concerted company effort is being made to raise funds for local charities and nonprofit organizations.
During the first quarter of 2012, the committee selected the American Heart Association to focus on. Various initiatives, including a bake-off, jeans day and participation in the AHA Walk in March, resulted in $2,522 raised for the organization. KDM also sponsored a table at the “Go Red for Women” event.
Habitat Humanity was a focus during the company’s second quarter, with $1,500 raised via a pie-in-the-face contest that resulted in a record number of employee participants. And when tornados struck KDM’s community in February, the Service Committee hosted a food/supply drive for Matthew 25 Ministries. Employees also put in generous volunteer hours.
The third quarter brought the challenge of filling a 16-foot truck with school supplies for Princeton City Schools, as KDM partnered with Frame USA to work on the monthlong “Fill the Truck” project. The committee hosted several fundraising events and appealed to local businesses for donations. KDM employees also contributed several thousand dollars to the effort.
Other company contributions included a $2,500 donation to the Ronald McDonald House, $2,500 to the Sisters of Mt. Notre Dame, $1,000 to Kicks for Kids, $500 to the Hope Box Derby and $1,500 to the Dan Beard Council Boy Scouts of America. KDM also donates hams to Tender Mercies each year for the holidays.