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Published in Manufacturing

Bonus interview: Q&A with UFP Industries CEO Matt Missad

BY Tuesday, November 09, 2021 03:47pm

GRAND RAPIDS TWP. — UFP Industries Inc. has maintained an active pipeline of acquisitions over the past several years as CEO Matt Missad maintains strong growth and a focus on diversification.

In the current issue of MiBiz, Missad and industry observers noted how the Grand Rapids Township-based wood products manufacturer stands out among its competitors with this strong focus on M&A.

Missad

In an online-only, extended interview with MiBiz, Missad provided his thoughts on other pressing issues in the manufacturing industry, from workforce shortages and supply chain issues to creating a corporate culture that focuses on diversity, equity and inclusion.

Read the full UFP Industries profile here.

With such an active lineup of acquisitions in recent years, is the company interested in a large, transformative deal?

From my perspective, it all depends. That’s kind of a cop-out answer, but it does depend. The size of the deal generally carries with it a significantly higher multiple from a valuation standpoint for the larger transactions, and we’re very focused on our return on investment on all of our transactions. We have found there is a certain multiple which we can’t really earn an acceptable return on, so I think that’s always been our challenge. We acquired PalletOne and Spartanburg (Forest Products) late in 2020 and early 2021. Those were larger transactions from a sales volume standpoint, but we were able to acquire them at a reasonable valuation, in our opinion.

In a seller’s M&A market, what are you looking for in a deal, and how do you stay competitive when vying for it?

A lot of private equity firms are chasing deals and they’re able to pay more because they look at the deal as: ‘I’m going to buy it now and either goose up earnings or reduce costs and I’m going to flip it in three to five years.’ We’re in it for the long haul, so we want to have a good relationship with the company. We want to have good management. We like to have management in place that is willing to stick around for a while. Those are different dynamics of what we look for.

UFP Industries has its own UFP Business School, which launched in 2016. The two-year program provides students with the equivalent of a bachelor’s degree in business administration. How has this effort gone so far based on expectations?

I think it’s an interesting concept and started out as an experiment, but it’s also one I’m passionate about. I think the cost of secondary education has far exceeded both inflation and, in my opinion, the benefit to the student. What we try to do is create a situation where we can provide a business administration degree in two years … and opportunity to move up in the organization. It’s relatively small — it’s not a ton of students yet, but it definitely is working.

With a majority of the students in that program being low-income, female or people of color, what role does the program play in UFP Industries’ diversity, equity and inclusion efforts?

I look at it this way: We want to make sure everyone has a great opportunity in our company if they want it. For us, it’s reaching out and making sure people are aware of our company and aware of the opportunities. We’ve never handed anything to anyone. Everyone has to earn it. For us, we promote from within whenever possible, so getting people into our company and training them, providing them the tools to grow and learn — that’s always been a part of our DNA. Reaching out to low-income people, people of color and people who we haven’t been able to bring on board in the past is important.

That brings up the topic of workforce shortages, which have plagued virtually every industry. How is UFP Industries compensating for it? Are you turning to automation much?

We’ve invested heavily in automation and we get a fair amount of questions like: ‘Why don’t you do more?’ One of the big reasons is the automation companies are all jammed up — they’re very busy with orders, everyone is trying to do the same thing and they have labor issues, as well. They can’t get equipment out. There are lengthy lead times in that area, but we’re definitely using automation both for ergonomic reasons and for labor reasons — trying to take out the jobs that require the most heavy lifting and ergonomically challenging roles so that we can move entry-level employees into higher, more valuable roles.

Managing through the chaos of COVID has likely imparted a few lessons that you’ll carry with you moving forward. What are some of those?

I was extremely grateful for the team of people I worked with. The amount of experience and dedication that they had and being able to manage through something like this knowing that our team has been through trials and tribulations before. Nothing quite like this, but similar in terms of impact. The way the market reacted during the lockdowns — with people kind of staying home and doing more projects — helped us get through it. For me, personally, (the lesson) was to keep your eyes and ears open and listen to your teammates and listen to the people on the factory floor. They were the saviors as far as I’m concerned. …We have to remember our core roots, which is that no one is better than anyone else.

For being such a large company, UFP seems to avoid corporate bureaucracy in its approach. Where does that culture originate? Were you someone who championed it given your journey from UFP groundskeeper to CEO?

I think there’s always been an attitude of treating everyone like a family and with dignity and respect regardless of the role each of us plays. It certainly helps that there are a lot of people in our company that started in entry level positions like I did and have become successful in the company due to their hard work and continuous learning. … That’s been engrained from the days of our founders. They’ve all kind of embraced that mentality.

— Interview conducted and condensed by Jayson Bussa.

Read 1075 times Last modified on Tuesday, 09 November 2021 15:50
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