A year that has seen the largest AV integrator sold to a venture capital firm and two large AV integrators join forces to create what’s believed to be the second-largest in the space now has its IT equivalent, with Carousel Industries expected to officially acquire fellow Ocean State firm Atrion later this year.
The deal, which was announced last week, creates a $500-million-plus company with more than 1,300 employees across 25 offices.
“We’ve known each other for almost a decade now,” says Carousel Industries CEO Jeff Gardner, noting the first conversation about the possibility of the companies combining forces first was about 10 months ago when Gardner and Atrion CEO Tim Hebert were at lunch together.
“We’ve partnered on some projects and competed on some others. I’d consider us friends as well as business acquaintances. There’s a lot of respect between us and a lot of synergies between our companies,” says Gardner.
Over the years, Atrion’s solutions have primarily been based on a Cisco platform, while Carousel used Avaya and other networking offerings but wasn’t able to break into the Cisco world. That lunch meeting with Hebert included a conversation floating the idea of Atrion being Carousel’s entryway into Cisco solutions.
“The more we talked about both business and what we each bring, the more excited I got about the prospect of bringing the two companies together,” says Gardner. “I can see this move help both companies reduce the number of vendors and simplify operations for both of us.”
Hebert, who will remain in his current position once the deal is finalized in the third quarter of 2016, says the decision to join the Carousel family was about bringing Atrion “to the next level.”
“For any owner, there are always big decisions and big choices you need to make,” he says. “It became a lot easier decision because of the trust Jeff and I have in each other and in each other’s companies.”
One thing both Gardner and Hebert noticed is not much overlap in terms of customers between the two companies, with Hebert estimating it at about 20 to 30 among 6,000 combined clients.
One interesting coincidence to come out of this deal is the theme of Atrion’s AlwaysOn Symposiums for 2015 and 2016 focused on culture and change, respectively. The sides were close to a deal at the time of this year’s Symposium in May, says Hebert, but the theme was chosen more than a year earlier.
Still, culture and the idea of change are two themes that are pervasive in Atrion’s offices, he says.
“We’ve always invested very heavily in culture and now we’re facing the biggest change we’ve ever faced,” says Hebert. “When you have an opportunity like this in front of you, you have to really look closely at where you want to be as a business and as an owner. This is a really strong story we’re building and the amount of opportunities for our employees and our customers grows tremendously as a result of this deal.”
Hebert highlights Atrion’s emphasis on unique client experiences as one strength the company can bring to Carousel, with a focus on providing “services and solutions that really connect with people.” That “higher-tough element” is something Gardner is excited to learn more about, he says.
Both companies have been solid in terms of attracting and retaining young talent, with Atrion becoming renowned for its apprenticeship program over the years. Hebert is also proud of its focus on business outcomes that stretches back a decade or so.
“Our plan is to combine our efforts to create growth,” he says.
Gardner is confident Carousel will find the best way to incorporate Atrion employees into the new parent company’s culture after completing nine acquisitions over the years. Carousel has always had strong growth and a solid sales force, he says, and now the focus is on streamlining the business.
“The growth potential is one of the big wins for the state of Rhode Island,” he says.
Gardner and Hebert expect the industry could see even more mega-mergers before the dust settles and we get to “the new normal.”
“As technologies converge, it’s difficult to be a single-threaded technology company,” says Gardner.
“People are looking for companies to provide a wider breadth of services,” says Hebert. “That’s harder to do when you’re not a certain size. Technology is more important than ever, so we need companies to have a bigger scale and a bigger footprint.”