Cameron Herold advises a CEO managing acquisitions to prioritize cultural integration first: align on core values and vision before imposing systems. Remove underperformers, keep acquired brands as divisions initially, and build teams through offsites. He cites a client who completed 21 acquisitions and sold for $107M.
Questions this video answers
About $200+ million
About $20 million
About 20 acquisitions (mid-1990s)
Circa 1994–1998
21 acquisitions; sold for about $107 million
Chapters
I'm the CEO for private equity backed security systems integration company. We're a national player and we have a roll up model. We put together the platform and now we're starting to buy businesses and I've done that in the past. Some of the issues or some of the challenges I have is that we're buying companies and we're about a 200 plus million dollar organization, about 20 million in EBITDA. Is that when we're buying other companies and rolling them in, how dynamic the organizational chart gets right and how personalities start to conflict and also how you util best out of the best people? Right. So you're just smiling. So I'm sure you, you've been through that before. I'm just wondering how you, how you target some of those challenges.
So Chris, to your point, when we did acquisitions and I started doing acquisitions back in 19. Shoot, 19, when was this? 94 to 98. I did about 20 acquisitions for Boyd Auto Body and Gerber Auto Collision. I was a partner in the franchising group. It's now a $2 billion largest collision repair chain in the world. I was doing some of the acquisitions in the early stages and what we learned was the first thing that you want to when you do the acquisition to integrate people on is make sure that they understand your core values and live them deeply, that they understand your core purpose and they mesh with it deeply. They understand your bhag and they really buy into your vivid vision of where you're taking the company. It's also to really get them to understand your core of how you got to where you are. Like understand your genesis story and all the trials and tribulations that got you like really integrate at the core level first. And I think most companies go sideways where they try to get the new company that they're integrating to use all their software or use all their processes or do everything. That's not what it's about. What it's first about is do we like each other, do we know each other, do we trust each other, do we respect each other? And then it's starting to get rid of the toxic cultural cancers, the underperformers, the ones that don't already live all those core values. You start with that. In terms of brand integration, what I believe you do is you keep your current company brand. So the company that you're acquiring, let's say it's Dustin Lockman sales and it'll be a division of the COO alliance in the second year, it's equal, It's Dustin Lockman, Sales, a division of CEO alliance, and they're 50, 50. And then at the third year, it's the COO Alliance. Dustin, you move into the bigger brand because it's like Shakespeare said, a rose by any other name would still smell as swee. So it doesn't matter what we call everybody. Don't piss off all the old legacy employees there by changing their name right away. Let's get them to like us and trust us and know us first. Another thing I try to do is get some mergers of the talent together, where we go off site and we go and do have fun together, we spend time together, we, you know, do a leadership. A couple of leadership retreats, but we stay in a couple of Airbnbs. So we wake up in the morning in our shorts and T shirts and have coffee together. And that's the team building you need is to get to know each other. Right. It's really integrating that. One of my former clients, John Ratliff, who sold this company for about 107 million using STS, did 21 acquisitions over the course of about five years. That's how we did all of his acquisitions, by merging the people and the core values and the talent first and then the systems later.
