With 2019 now in full swing and Merger & Acquisition (M&A) activity continuing at a record pace, I would like to take a moment to remind everyone that Tech Systems remains a privately held company that is…. Not for Sale.
Given our consistent growth and success over the years, it would only be logical to think we were building this business with a future sale in mind. While we have been approached many times about the possibility, we have stood firm that we are not a viable candidate for a Merger or Acquisition.
Our rationale for not selling is quite simple. We believe the Merger and Acquisition activity in the Security Integration space is actually the “Murder & Assassination” of small entrepreneurial companies. These firms typically choose to sell their business to either, a large publicly traded company or a venture capitalist group.
While I can’t fully comprehend their logic for selling, I do appreciate that their sale will ultimately lead to new client opportunities for Tech Systems. We have all read the press releases after these transactions, stating how transparent the acquisition will be to the seller’s clientele and how absolutely nothing will change…. Oh Contraire.
The entrepreneurial spirit of the privately held company being purchased can only change when you’re shifting away from a business model where decisions were based on client satisfaction to a business world where all decisions are based solely on providing a profitable return on investment to their shareholders.
It is worth noting that this is the traditional exit strategy for the majority of businesses in any industry. While the transaction is typically mutually beneficial for both the buyer and seller, it is seldom if ever advantageous for the employees and clients of the seller. Faithful long-term employees, usually in corporate positions are ultimately let go due to the duplication of resources from the consolidation. The clients first pain point tends to come from a service perspective where their needs go from being responded to within hours to now being addressed in days or weeks.
We often find ourselves engaged with these orphaned clients within the first 12 months of the transaction occurring. Those conversations usually start with the client wanting to know right up front what our long-term strategy is for Tech Systems. You can immediately sense the calm come over the room when we tell them that we became a 100% Employee Owned Company when we became an ESOP in 2015.
If it is not obvious enough from this blog, I’m a huge proponent of private ownership and rewarding those who contribute their careers to the growth and success of our company. When I made the decision for us to become an ESOP as my long-term exit strategy, it was with the vision in mind for this organization to maintain our 30 year legacy for providing fanatical customer service in an environment where everyone is still empowered and trusted to do whatever it takes to always exceed client expectations.
To further reinforce that vision Tech Systems has recently become a member of the Tugboat Institute (www.tugboatinstitue.com) and is fully committed to all the standards required to be a Certified Evergreen Company…. Our goal is to be the best and what we do, not the biggest.
Being 100% employee owned and privately held will keep our entrepreneurial spirit alive and well while our ISO 9001 & 27001 certifications will continue to strengthen our commitment to quality and continuous improvement…. We are built to last and here to stay!
I’m very proud of what we have built at Tech Systems. I look forward to working with all our employee owners as I sunset my career over the next 10 plus years.