Winner | Dealmaker: Executive
David DeBoer, CEO, Burke Porter Group
- Annual revenue: Approximately $300 million
- Tota employees: 197 (275 across Michigan; 996 worldwide)
- Business description: Burke Porter Group manufactures a variety of automotive and other vehicle testing equipment including acoustic testing, dynamometers and balancing. The company operates 800,000 square feet of manufacturing space across 31 global locations. Burke Porter Group also serves the life sciences, consumer electronics and advanced automation markets.
- Personal info: Wife, Mara. Two daughters, Bianca and Hannah
- Academic degrees: Master of Science in Industrial Administration from Purdue University; Bachelor of Science in Mechanical Engineering, General Motors Institute (now Kettering University)
- Advisers: JP Morgan Chase, Bank of America, Fifth Third Bank, HSBC (banking); Plante Moran and Deloitte (financial); Barnes & Thornburg LLP (legal)
It’s been a busy year and a half for David DeBoer.
The CEO of Grand Rapids-based Burke Porter Group spent 2015 consummating three acquisitions that would give the manufacturer of complex vehicle testing equipment a range of new products.
“These (deals) complemented a strategy we started probably six years ago,” DeBoer told MiBiz. “It’s patience and strategy first — that’s the primary driver, not price or necessarily opportunity. These were all warmed up without a broker. It was a private talk introduced and talked to personally by me with a specific strategic endgame in mind.”
Burke Porter Group’s acquisitions during the July 2015-June 2016 period included:
• Epic Equipment and Engineering Inc., a Shelby Township-based manufacturer of integrated assembly lines for the automotive industry.
• Universal Balancing, a Bristol, United Kingdom-based producer of equipment to ensure proper balance on components such as brake rotors.
• CIMAT, a Poland-based producer of balancing machinery for turbochargers, driveshafts and other components.
For his success in closing the three deals last year, DeBoer was honored as a winner of the 2016 MiBiz Deals and Dealmakers of the Year Awards in the executive category.
However, DeBoer has been active in M&A at Burke Porter Group for some time. He led the manufacturer through a sale of its own, inking a $90 million deal with Hong Kong-based China Everbright LTD in March 2015, and has kept up dealmaking this year. Burke Porter closed on two additional transactions in August for Korvis Automation Inc., an Oregon-based manufacturer of automation equipment, and Kleinknecht Group, a Germany-based producer of control panels and systems for a variety of machinery. The five acquisitions mark the culmination of a six-year strategy to enter new product segments in the automotive market, he said.
In a conversation with DeBoer, it might be easy to confuse him for an engineer accustomed to working on the plant floor. The CEO can speak without pause about every aspect of the machines Burke Porter Group and its affiliates produce, which measure everything from noise, vibration and harshness, to wheel and tire alignment, sensors and the functionality of other equipment.
While DeBoer began his career in engineering, earning his mechanical engineering degree from the former General Motors Institute, now known as Kettering University, he’s parlayed that same precision and analytical prowess into his dealmaking strategy.
For one, once a company agrees to disclose its financial information, DeBoer does all of his own financial analysis and benchmarking before comparing notes with a financial adviser.
“There’s a lot of factors and a lot of thinking,” DeBoer said. “Every morning, you wake up around six, drink your coffee, read a little news, then for me it’s constant scenario planning — playing out the different chess moves. If I did this, would the customer appreciate it? Would they be offended? You have to play that all out.”
However, the dealmaking process is far from strictly analytical, DeBoer said. Getting the deal across the finish line really comes down to understanding people.
“People are big bags of emotions,” he said. “I’m describing it as analytical but it’s about people.”
DeBoer believes that understanding people, particularly the seller of a business, is essential when it comes to managing information uncovered by advisers during the due diligence process.
“You are surrounded by advisers that fear-monger a little bit,” DeBoer said. “People can get really wrapped up into the potential cancers in a business so you get reports from very professional advisers who found a lot of problems and some people get cold feet.”
However, those “uglies” may not always be negatives, he said.
While a family-owned company may not adhere to strict inventory management principles or generally accepted accounting practices (GAAP), those challenges do not need to derail potential transactions outright, he said.
“For me, it’s just realizing that this person had run a business,” DeBoer said. “I’m stepping into their shoes (and) looking for, ‘Was it a rational way to run the business?’ You’re hunting for, ‘Is this really what I thought it was or is it different?’ … Not everyone is running a Fortune 500 company with perfect, proper systems.”
Through it all, DeBoer stresses the importance of “knowing when to turn it off” as an important strategy to help stave off deal fatigue.
“It can consume you so you have to be able to compartmentalize and say, ‘I’m going to resolve this, I’ll look at it on Monday, it’s still going to be there,’” he said. “Usually, I just use my Saturdays and Sundays to clear my head.”
With the marathon of acquisitions over the last year and a half largely in the rearview mirror, Burke Porter has now entered what DeBoer describes as a “digestion period.”
Although the company will keep an eye out for tuck-in opportunities, DeBoer said he plans to use the next six months or so to develop new products and craft an organic growth strategy, noting the deals should position the company to grow $150 million in organic revenue.
In reflecting on the company’s active dealmaking, DeBoer said he’s most proud of crossing the finish line in a win-win situation with all the stakeholders involved in the deals.
“You have employees that you want to excite and keep motivated. You have the outgoing person who won’t sell unless they’re satisfied. You have advisers, shareholders, bankers — you have quite a few constituents that you’re juggling, so hunting for and convincing people there is a win-win outcome here — that’s not exactly easy,” he said. “The day you close is probably a solid year’s worth of work, or in some cases multiple years.” ν