Published in Manufacturing
Zeeland-based Woodways Inc., a manufacturer of custom residential cabinetry and furniture, shopfitting and commercial furniture, was acquired by Italy-based Zordan Group for $2.3 million. Zordan Group plans to invest more than $2 million for a new, larger facility for Woodways in Zeeland. Zeeland-based Woodways Inc., a manufacturer of custom residential cabinetry and furniture, shopfitting and commercial furniture, was acquired by Italy-based Zordan Group for $2.3 million. Zordan Group plans to invest more than $2 million for a new, larger facility for Woodways in Zeeland. COURTESY PHOTO

Acquisition of Woodways by Italian company merges cultures, custom product focus

BY Saturday, June 09, 2018 12:58pm

ZEELAND — Every acquisition has its share of obstacles to clear, but the process becomes even more challenging when the buyer and seller speak different languages.

That was the case with Zeeland-based Woodways Inc., a manufacturer of custom kitchen cabinetry, which finalized a deal last month to sell to Italy-based Zordan Group for $2.3 million.

The acquisition was the culmination of a nearly three-year process in which Zordan Group invested in Woodways and progressively acquired a larger stake in the company.

“With different cultures, with a different way to work, with different languages, there were challenges to get past,” Zordan Group President and CEO Maurizio Zordan told MiBiz. “For what is possible to do here, our clients are very happy. … The people here like to do the job because it is not a boring job doing custom (work), and this is the same for the people in Italy.”

The Valdagno, Italy-based Zordon Group manufactures store fixtures and interiors for high-end brands, including Bulgari, Ferragamo, Karl Lagerfeld and Van Cleef & Arpels. The company also offers tailor-made interiors via its furniture division that supports architects and interior designers in their projects.

Including corporate property, the total deal value was more than $3.2 million. Woodways employs 37 people and operates a showroom on 28th Street in Grand Rapids and a manufacturing facility on Construction Court in Zeeland Charter Township.

The deal adds to Zordan Group’s global footprint and removes some constraints on its overseas business, namely the three-week shipment period to get goods to North America.

Zordan said his company now plans to invest more than $2 million into a new facility in Zeeland to house Woodways’ carpentry equipment, wood inventory and a shopfitting showroom. Although the company is still in the process of finding a contractor, it expects construction to begin after January.

So far, the partnership and acquisition have been a “great” fit for both companies, said Marta Fenu, marketing and business development manager for Woodways. Employees from both companies have traveled between Italy and Zeeland to learn from one another, she said.

The visits have been particularly important for Woodways employees to learn about the culture of the new parent organization, Fenu added.

“Every time they went, it was about learning what was going on in Zordan, how the organization worked, how the business was managed, but at the same time it’s been about the experience of the culture,” Fenu said.

She added that Woodways’ versatility and custom designs set the company apart from other firms in the industry.

“We are local and we are manufacturing right here in Zeeland,” Fenu said. “Woodways is very versatile in terms of style because we are truly custom, and then we can serve everyone in the market in every taste and style. At the same time, our background and ties to the European and Italian markets allow us to develop the contemporary style with a unique capability.”

INVESTING EARLY

Before investing in the deal for Woodways, the Zordan Group developed a list of 150, $2 million to $5 million companies in North Carolina and Michigan as a means to enter the U.S. market, according to Zordan.

“We started thinking about having a facility in the United States in the summer of 2013,” he said. “Looking at a number of our sales, we have discovered in the previous eight years that there was a big percentage of destinations here in the United States. Woodways, in our opinion, was the best because of the organization and the quality.”

In 2015, Zordan Group partnered with Woodways’ owners to invest more than $400,000 into new machinery at the Zeeland plant. Zordan said that early investment set the stage for future developments.

“It’s about investing in the people,” Zordan said. “The main characteristic of Woodways and Zordan is that every company truly does a custom production. It’s a reason why we are truly together.”

Woodways generates roughly $5 million in annual sales, with half of the business coming in residential furniture, 30 percent in shopfitting and 20 percent in the commercial segment. Currently, the company maintains clients in Vancouver, San Francisco, New York, Mexico City and beyond.

In the next few years, Zordan said he’d like to see Woodways grow annual sales to $20 million.

According to a September 2017 report from Cleveland-based The Freedonia Group, cabinet demand is expected to grow 5.9 percent annually to $17.1 billion in 2021.

Likewise, Zordan expects to capitalize on the market as well as from the company’s access to “untouched (United States) markets, including the Midwest.” He said the deal for Woodways opens “a lot of possibilities” for Zordan Group.

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