GRAND RAPIDS — After 35 years under the ownership of founder Arlen Smith, Central Interconnect Inc. has been sold to new owners at the culmination of an 18-month-long process.
Partners Neil Brown and Wade Thompson have already started to implement a growth strategy they hope will double the audiovisual design and installation company’s $5 million in annual revenues over the next five years. To reach their revenue target, Brown and Thompson plan to increase Central Interconnect’s sales staff and expand into untapped markets in Lansing and Kalamazoo, Brown said.
“They’re having some growth over there, so we thought it would be a good idea to look at that area,” said Brown, who serves as the company’s president.
Central Interconnect currently employs 28 people and plans to hire up to five additional employees over the next year. The deal for the Grand Rapids-based company, which Smith founded in 1981, closed earlier this month. Terms of the deal were not disclosed.
Both Brown and Thompson come to the audiovisual industry from different careers. Brown currently works in the insurance industry, while Thompson serves as a physician. They plan to keep their day jobs while managing the company.
“I think it is pretty sexy,” Brown said of the audiovisual industry, noting that he enjoys the prospect of distilling complicated technology into a package that non-tech-savvy people can operate.
The global professional audio and visual market is expected to reach $114.2 billion in 2016, up from $91.8 billion in 2012, according to a report by InfoComm International, a Virginia-based trade association representing the industry. Moreover, the industry is forecasted grow at a compound annual growth rate of 11.75 percent from 2016 to 2020, according to a report by Research and Markets.
The partners had been scouting for deals for some time before finding Central Interconnect. After some initial research, Brown and Thompson for 18 months worked alongside Grand Rapids-based brokerage firm Calder Capital LLC and Smith to come to a deal. Calder Capital represented Smith in the sale.
The deal marked Calder Capital’s longest transaction, largely because of Smith’s care and concern for the business he had built from the ground up, said Managing Partner Max Friar.
“It’s one where we really had to fight tooth and nail to get this across the finish line,” Friar said. “(Arlen) was very concerned about the banking process and the transition.”
Friar also noted that Brown and Thompson were among the first of a handful of potential buyers he introduced to Smith after the executive made the decision to sell the business.
“They stuck with (the deal) longer than most buyers would have,” Friar said.
For Brown and Thompson, the wait was worth it.
“Arlen wanted to do it right so his customers were taken care of,” Brown said. “(The deal) took a while, but it all paid off.”