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 System
Integrators was a leading small to mid-volume provider of
electronics manufacturing services to original equipment manufacturers
located in the central United States. The Company had successfully
positioned itself as a reliable and high-quality designer
and assembler of electronic products to several large and
growing end-use markets, including industrial controls, medical
instruments, security devices and transportation. Rapid growth
in the Company’s electronics assembly business resulted
in a growing dependence on a small number of large and sophisticated
customers. The vulnerability created by this strategy quickly
became apparent to SI’s three owner-managers when one
of the Company’s key accounts moved its assembly work
to another supplier with facilities located closer to the
customer’s own operations.
After stabilizing the business, the Company’s shareholders
began to evaluate various strategies for maintaining and potentially
growing the value of their business in an increasingly competitive
environment. In order to take the business to the next level,
the owners realized they would have to invest a significant
amount of additional capital, risking their personal wealth
and lifestyles. These were risks they were not prepared to
assume. The Fortune Group was retained by SI to act as financial
advisor in the sale of the Company.
As the manufacturing sector began to slow creating an additional
impetus to pursue a transaction, The Fortune Group devised
a strategy whereby key customers and suppliers were informed
of SI’s pursuit of a strategic partner, thus, allowing
SI to continue to preserve and even grow these relationships
without compromising shareholder value. Ultimately, we negotiated
a sale transaction with Raven Industries (Nasdaq:RAVN), a
diversified industrial manufacturing concern. SI’s management
team, and design engineering capabilities greatly enhanced
Raven’s Electronic Systems Division’s product
and service offerings for its customers and SI’s customer
base allowed Raven to expand its served markets and geographic
presence in the Midwest.
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