Winner | Deal: Less than $25M
- Company: Bloem LLC
- Top executive: Ryan Mast, President
- Annual sales: Between $40 million and $50 million
- Total employees: 15 in West Michigan; 150 in Florida
- Business description: Hudsonville-based Bloem manufactures a variety of molded plastic decorative planters, bird baths and other outdoor garden accessories.
- Advisers: Miller Johnson (legal); DWH Group (financial) and Huntington Bank
While Bloem LLC had been hunting for in-house production capacity that would allow it to grow, the company found its solution in an unlikely place: an unsolicited email from one of its largest competitors.
Fiskars Brands Inc., a Finland-based publicly-traded global consumer brands company, contacted the Hudsonville-based manufacturer of planters and other outdoor lawn and garden products in a bid to spin off its American Designer Pottery business, headquartered in Apopka, Fla.
For Bloem founder and president Ryan Mast, the inquiry came as a surprise.
“I couldn’t believe it. Honestly, I was a bit shocked at first,” Mast said. “It should have been them buying us. It really was the fish swallowing the whale. They were one of the main players in the industry, and we looked at them as being a very difficult to displace competitor and we were beating our heads against the wall for several years.”
Bloem’s acquisition of American Designer Pottery from Fiskars won the company the top spot in the 2016 MiBiz Deals and Dealmakers of the Year Awards for transactions of less than $25 million.
Mast founded Bloem in his basement in 2012 along with his sister and a handful of investors. After gaining traction with a handful of key accounts, the company quickly launched an acquisition strategy to capitalize on the consolidating lawn and garden market.
While Bloem had made two previous acquisitions — DuraCo Brands and BloomBags — the deal with Fiskars was different. In its two prior deals, Bloem built the acquired companies from the ground up, whereas this deal was for a mature operation with an established book of business, Mast said.
“Being it was a carve out from a larger organization made it more challenging because there were costs associated with it that we had to assume or make assumptions on to drive up that working capital number,” Mast said.
That meant Mast relied heavily on his group of advisers to help analyze and drill down into American Designer Pottery’s financials to ensure the best multiple on the deal.
“At that point, it’s all due diligence,” he said. “Working through the due diligence process with (advisers) who have done it at that scale was the ticket.”
The scope of the deal also presented challenges when it came time for Bloem to close on the acquisition.
Although the deal with American Designer Pottery would give Bloem much-needed access to in-house production capability, the prospect of striking a deal with a publicly traded, international firm seemed daunting, Mast said.
“You’re dealing with a publicly traded multinational company (that’s) very buttoned up in their organization and procedures,” he said. “Then you have more of an entrepreneurial-spirited company coming into the mix here looking to take over a carve out.”
The size disparity between the companies also presented communications challenges as Fiskars could dedicate departments of people to the acquisition, while Bloem had only a handful of employees able to work on the deal.
“Aligning those individuals on each side to move (the deal) along expeditiously was challenge number one,” Mast said.
Once the deal closed in January 2016, Bloem began integrating American Designer Pottery’s manufacturing into its operations. Initially, Mast was concerned about how American Designer Pottery employees would integrate with the culture at Bloem.
“We found the people to be culturally an incredible fit for us,” Mast said. “They were hungry for more focus on their flower pot category. They were committed to the organization and the facility in Apopka, they came with years of experience, and we really hit it off well with them.”
Since acquiring American Designer Pottery, Bloem has invested approximately $1.5 million in facility upgrades and new equipment into the operation in Florida. Bloem plans to make similar investments as the company continues to grow, Mast said.
“The employees appreciated the love we were showing them,” Mast said. “It really gave us the opportunity to ride in on a white stallion and that was unique. So often these acquisitions folks come in and they’re looking for cost savings. For us, that’s a long-term goal, but at the same time, they have an identity — they’re Bloem.”