It’s really hard to believe that 2021 is drawing to a close, but it’s true. Only three-plus weeks remain until the champagne corks pop and we usher in a bold and exciting New Year. We can only hope 2022 will offer a fresh start, free of political and pandemic turmoil. Well, that may be asking for a little too much, but I think you will agree that if we can skirt further variants of COVID-19, battle through inflation and avoid a recession, unkink the supply chain and turn the conversation back to doing business as usual, then at least it’s a step in the right direction.
Since you’re busy trying to pull clients through the sales funnel before they go on holiday hiatus, we’ll offer some quick, easy reading and recap some of the most noteworthy events of 2021. As we start the countdown to 2022 clock, we’ll begin with merger and acquisition talk, which is always a popular subject. Our data shows that activity has been brisk in 2021; we’ve logged in the range of a 35%-40% increase in deals reported. While it’s hardly concrete data, it’s clear that industry transactions are back on the rise following the pandemic-marred 2020.
With that in mind, we offer the top five 2021 dealers based on M&A activity, with the caveat that this list only represents the reported deals (we’re bound to have missed some).
5. Donnellon McCarthy Enterprises (DME), Cincinnati. The Queen City dealer isn’t big on making splashy deals that grab headlines, but it can be counted on to fly under the radar with a deal or two per year. Backed by the veteran leadership of CEO Jim Donnellon and President Jim George, the company also boasts a rising star in senior vice president of sales Rich Brandenburg, a 2021 Difference Maker.
The company obtained American Business Machines, a firm with a balanced portfolio that will enable DME to flex its service muscles in the Indianapolis market. DME also ushered in 2021 by announcing the acquisition of T&I Office Equipment, an authorized Savin dealer, expanding its geographical footprint by providing reach into the Illinois market.
4. Applied Imaging, Grand Rapids, Michigan. President and CEO John Lowery has catapulted his operation beyond the $100 million plateau and has demonstrated a voracious appetite for closing out deals even during the most difficult of periods. While we have the dealer with two acquisitions on the books for 2021—Lasers Resource of Grand Rapids and Lansing, Michigan-based The Polack Corporation—Lowery has pulled the trigger on no fewer than five deals since the start of the pandemic. With the ink barely dried on the acquisitions of Kopy Sales, Upstream Office Solutions and ACR, Lowery undoubtedly is set to announce more additions to the Applied Imaging stable.
The Lasers Resource deal was no small matter, as it enabled Applied Imaging to add a strategic new manufacturer line with HP. Lowery has long followed the strategic line of thinking by making investments during a down market to get the jump on the competition, which he also did during The Great Recession period in 2008-2009. The company also diversified its product portfolio to reflect the needs of the market. A perennial player, it would not be surprising to see Lowery announce a deal or two at the start of 2022.
3. Marco, St. Cloud, Minnesota. One of the things I’ll miss most in the coming year is not being able to interview Jeff Gau. The now-retired Marco CEO provided super copy on a range of topics and wasn’t afraid to get deep in the weeds on any given subject, and wasn’t afraid to share his views for the betterment of the dealer community. Fortunately, former Sharp head honcho Doug Albregts is equally accommodating and we’ll be blessed with his “From the Dealer Executive Desk” insights throughout 2022, including in the January issue of ENX, so be sure to check it out.
It was business as usual for Marco following a relatively-quiet 2020, as the dealer picked up West Central Shredding, All/Pro Office Technology and Wisconsin Imaging Solutions. Could an even bigger play be in the offering for 2022?
2. Novatech, Nashville, Tennessee. Dan Cooper has ushered in some significant changes at Novatech since taking over for Dan Metz in May of 2019, including the launch of a managed office suite encompassing managed print, managed IT, cloud and cybersecurity services. A 30-year veteran and a protégé of some of the industry’s greatest influencers such as Dan Doyle, Tom Johnson, Bill Kamarak, Michael Shea and Tom Salierno, Cooper soon became a major cog in Xerox’s Global Imaging machine after honing his skills in the Danka chain.
When Xerox decided to go in a different direction, so did Cooper, and he brought the dealer model with him to Novatech, where the transactions keep flowing. In 2021, Novatech obtained United Laser, Pahoda Imaging Products and Digital Office Solutions. It will be interesting to see the company’s strategy play out in 2022, but the obvious guess is Novatech will be looking to add more companies that have already embraced the managed service strategy.
1. UBEO Business Services, San Antonio. There’s something about Texas deal makers that is striking. Jim Sheffield, the CEO of UBEO, reminds me a lot of Joe Davis, the now-retired head of Consolidated Graphics (CGX), the Houston-based consolidator that built its way to a billion-dollar empire in the commercial printing universe. Joe has that deep, gravelly voice that sounds like he should be a character on Yellowstone. We already know that Sheffield has plans for explosive growth, and he put that on parade in 2021, as the dealership scooped up Rainmaker Document Technology, United Reprographic Supply, Business Copy Associates, James B. Schwab Company and Digitech Office Machines.
Another ace up UBEO’s sleeve is President James Morrissey, the man guiding the expansion plans and boasts 16 years of experience under the Alco Standard/IKON Office Solutions umbrella, in addition to a tour of OEMs in Canon, Ricoh and Xerox. Like CGX before it was sold, UBEO fosters an approach where the companies are run regionally to enable better customer focus while maintaining a flat headquarters operationally. Add in strong leadership on the service level and a concerted push into production print, and you have a candidate that is prime to become the first billion-dollar dealer network before the end of the decade.
