FINALIST: DEAL OF THE YEAR, LESS THAN $25 MILLION
Amy Sparks’ acquisition of Nuvar Inc. in May required the company’s new top executive to adapt to her role as an “outsider” as she worked to integrate herself into the operations.
The deal came about as a result of Sparks’ years-long business connection with Mark Kuyper, the founder of the Holland-based manufacturer and developer of finished goods primarily for the contract furniture industry.
To position the company for success after the close of the acquisition, Sparks — who took over as president and CEO — needed to showcase her leadership abilities to Nuvar’s approximately 140 employees.
“I was the outsider,” Sparks said. “That was unique coming into a team that was very much connected and had a long history with one another. It was incumbent on me to learn their rhythm and how they operated and then (figure out) how I could come in and work with that team and really make it better.”
Sparks credited her experience within the industries Nuvar serves and her background in financial management as crucial to positioning the company for growth after the deal, which was selected as a finalist in the 2018 MiBiz M&A Deals of the Year Awards in the less than $25 million category. She also retained nearly all of the company’s employees.
Early on in her discussions with Kuyper, Sparks made it clear that she needed to know that key management staff were on board with the deal, and that there would be continuity in the existing staff mentoring and leadership training programs.
“You need a culture,” Sparks said. “Making sure that was aligned (was) first and foremost. For me, buying into a business where there’s a solid team in place was a tremendous bonus.”
Prior to acquiring Nuvar, Sparks spent 15 years leading Soundtech Inc., a Grand Rapidsbased acoustical engineering firm that shared several clients with Nuvar.
When Kuyper decided to begin exploring succession options for the roughly three decade-old company, her name rose to the top of the list, driven particularly by her experience in the contract furniture market.
“Both of us saw the right fit and connections from the start,” Sparks said. “It did take a process of a couple years, something that we entered into both very carefully and with a lot of forethought to make sure it was right — first for the business, and right for Mark and myself.”
Advisers who worked on the deal described it as “perfect situation” for Sparks and Kuyper.
“We all were very collegial and we all tried to stay focused on the goal of keeping everything on a friendly, amicable basis,” said Jon Siebers, an attorney and shareholder at Grand Rapids law firm Rhoades McKee PC, who served as legal counsel for Sparks on the transaction.
“There were some bumps in the road that we hit along the way, as there are in every deal, but we focused on the goal of making it work and keeping Mark and Amy’s relationship strong,” Siebers said. “You don’t see that in every deal. A lot of deals, if the buyer and seller don’t have a relationship to begin with, they don’t care if that relationship is tarnished in the deal, so the advisers may tend to be more acrimonious.”
Trade groups representing the office furniture industry project continued expansion for the sector. The Business and Institutional Furniture Manufacturers Association (BIFMA) projected growth of around 4.5 to 5 percent in 2018 for the corporate, education and health care sectors.
While tariffs and the potential for an escalating trade war do lend an air of uncertainty for a company like Nuvar, Sparks said they are smaller concerns than the ongoing labor shortage.
Nuvar, which has annual revenue of between $40 million and $70 million, will likely need to hire 20 to 25 new employees in the near future if the company secures a couple of possible new contracts, Sparks said.
To that end, she credits the company’s people and culture as being crucial to ensuring its continued growth. While Sparks remains open to future acquisitions if the right opportunity presented itself, Nuvar typically prefers a more organic approach to growth.
“If you can take a really strong culture you already have and grow that internally, I find that’s (better) for success,” she said. “That’s our first focus.”