Automation Roll-ups & Growing Technical Leadership Talent

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Welcome to M and A Science where leading M and A practitioners share lessons learned from their experience. If you're interested in keeping up with the latest from M and a science, visit mascience.com and subscribe to our free newsletter. Every Monday we share highlights from our interviews and invitations to events as we build the greatest community of forward thinking M and A practitioners. Again, that's mascience.com I'm your host Kisan Patel, CEO and founder of M&A Science. Joining me today is Dan Burseth, Vice President at Eckhart.

Eckhart is a private equity owned designer.

And builder of advanced Automation and Industry 4.0 solutions for the largest industrial companies in the world.

Today we're going to talk about the.

Opportunity and challenge of rolling up small manufacturing companies. How are you doing today Dan?

I'm doing great. Great to be chatting with you. Thanks for having me.

Hey, my pleasure. Can we kick things off with a little bit about your M and A background?

I work at a private equity backed automation integrator called Eckhart. We're headquartered in Michigan but have locations in a couple different states. What is an automation integrator? It's a company that helps other manufacturers build their production processes. So for example, recent projects that we've completed are to help a medical device manufacturer remove the human labor from their titanium joint replacement product line. We're helping a manufacturer of treadmills improve the quality of their products with end of line vision checks for examples. Of course, right now every automotive company is updating their factories to be really EV and battery centric. So there's a tremendous amount of work happening right now in the automation land and it's a really exciting time to be doing this. So there's an incredible amount of variety in the day to day business, which is why I love it. The company has really grown rapidly since I joined it in 2015 and we've met a lot of the demand that we're seeing in the marketplace by way of acquisition of smaller but similar companies. So it's been really central to our strategy to meet the marketplace demand. Our industry is one that's highly fragmented. With the support of our PE sponsor, we've bought and integrated, I think 6 companies between 2016 and 2018 in the last couple years. We've gone through all the hard work, the less glamorous work I would say, of doing the integration and really moving the needle on how all of these companies move as one and go out and serve a loyal traditional customer base. So been an incredible journey and buying of other companies, intelligently integrating them has been central to our success.

Can we walk through how you go about finding and evaluating opportunities to buy small manufacturing businesses?

I come from a very different world than where I am now. I was previously working in New York City for a very large money management group and had this come to Jesus moment where I realized that I wanted to do something a little bit different. I'm from the Midwest. Originally, I wanted to return to the Midwest. I always dreamed of being an owner and operator of a small business and eventually had the big moment in life where I decided to leave New York City and ultimately move to a 75 person equipment manufacturer in Lansing, Michigan. I would argue that's about as big of a career shift as a person can make. But it seems like a crazy decision. But I put a lot of thought into it, evaluated it, and here are some of the things that I considered. Number one was it seemed like everyone that I knew was really pursuing jobs in what I would call the coastal economies. Big tech, finance, law, media. And so I sensed that there was probably a significant amount of opportunity in more traditional industries and especially in manufacturing. A big challenge in manufacturing right now is the lack or the absence of younger technical talent. There's just an enormous shortage of engineers in our country and the ones that are here are going to Facebook and Google and more traditional tech routes. So huge talent shortage in our industry. And that was something that I thought might be a nice opportunity for me. At roughly the same time I came across an article and a phenomenon that was pretty transformative to me called the Great Wealth Transfer. Are you familiar with this? Do you know what the Great Wealth Transfer is?

No. Tell me about it.

The great wealth transfer, it's happening right now. It's baby boomers, easily the most economically successful group of people in the history of civilization, American baby boomers. And right now they're in the process of, of transitioning about $60 trillion of wealth to heirs, mostly to Gen X and millennials, which I would consider myself to be a part of. And the vast majority of that wealth transfer is going to come by way of small private company stock. Small business ownership is really the wealth bedrock of this country. Small business ownership is not something that's easily transferable. So what this means is that you have literally tens of thousands of small businesses throughout the country that need to change hands in the next 15 years. I had this hypothesis back then that the vast majority of these businesses really had no succession plan. I think that is turning out to be true. So let's do an example. Mike Sr. Owns a small business that makes air compressor components in Ohio. And that business does $8 million of revenue a year. Mike Sr. Has built that business for the last 40 years and is looking to retire. So what are his options? He has two grown kids. Mike Jr. Is a dentist in Texas, and his daughter Katie works at Facebook in San Francisco, let's say. And they each have their own families there, and neither of them want to have anything to do with a small but highly profitable plastic molding business in Ohio. That option is off the table. Mike Sr. Could ask if his employees are interested in buying him out and trying to hand off the business to an employee, which is a great route if you can make it happen. His employees, for whatever reason, just aren't comfortable assuming an ownership stake in the business. And so that option is off the table. Mike attempts to go out to the investment community, but there just really aren't a lot of business buyers at that very small end of the range. Mike's without many options for transitioning a very profitable $8 million a year revenue business and finding that next group of people to run with the torch. That's not necessarily the size of business that we buy, but it's a really common example that you see in the data that I encounter when talking to business owners and our suppliers and our customers pretty much every day. And so what this means is that there's a lot of really incredible businesses out there for sale that just don't have a natural buyer. And so it presents a really good opportunity if you're willing to do the hard work to find those businesses. Have a very emotional process with the business owner to figure out what a transition looks like and then ultimately take ownership and do the hard but fun and rewarding work of running the business. And that situation is one that has unfolded many times at Eckhart here in the last six years. I think every business that we bought is one in which it was from a founder. The average tenure in the business was probably 30 years. So we had one business that we acquired from an owner that his dad had started and he started working for his dad when he was 10 years old. When he was finally ready to sell the business, he was close to 70. And so he had worked and grown that business for 60 years, which is incredible to think about, especially in today's age. So there's this very significant emotional component to these transactions and I take that very seriously. A responsibility that comes with owners and people entrusting us with their life's work. Those are the really incredibly powerful and fulfilling on those promises is something very motivating to me and very powerful to me. So that was the second bucket, right? The availability of incredible businesses all throughout the country. And I guess most specifically I learned about Eckhart by way of a private equity group called LFM Capital. They're based in Nashville, Tennessee. I was really drawn to their values and the approach of their team to be small business and manufacturing centric and got to know that group and then got to know the gentleman that they were recruiting to be the CEO named Andy Storm to come in and run the business. And I hit it off with Andy and I knew right away that this is someone I wanted to work with for a long time. A lot of theories ended up proving out to be true and aligning and eventually allowed me to take the plunge into the wild world of lower middle market manufacturing businesses.

I like how you profiled the ideal businesses you go after. How do you find them? Are you doing that yourself? Are you out there searching for these companies directly? Are you using a big network of bankers? What does that look like?

A network of bankers, which would be the most traditional route, is probably the least common. Looking at the ones that we acquired, it was either companies that we encountered just through day to day operations. One of our most successful ones was our primary competitor at one point in time. And instead of slugging it out and competing head to head, we went through the really hard but rewarding process of buying our most direct competitor and trying to form that marriage. And it went incredibly well. So that was a company that came by way of a non traditional process. And those are tending to be some of the best Opportunities that we found. So our supply base, we say, hey, where do we want to vertically integrate our competitors? Perhaps there's someone that we've worked with or teamed up with on another project in a factory and we really liked how they operated or what they brought to the table. I really like fishing in that pond. Businesses that we know and we've interacted with versus ones that we get introduced with by way of a PowerPoint.

And are you solely responsible for finding these opportunities or do other folks in the company help you?

I am not solely responsible. It's a rather small part of the day and it's one of those things where luck would have it for the most part. And it's a variety of people. So my boss Andy is involved in that heavily. But again, when we bought our competitor, that was a group that our employees had known for 40 years. We approached it or we started our talking to them through the employees at our company as well. Can come from a lot of different angles.

Yeah, that's interesting. Always curious on how do you get that alignment. It's just not one person, but the company can understand opportunities out there. Know to bring those conversations up to make something out of it.

Yeah. Fairly organic. What are companies that we like to work with and why? And then there's conversations that on top of that, is this someone that we would. We'd love to. To buy and. And incorporate into our operations. And that's proven to be a really great pathway.

Now, looking at the ideal customer, you pegged an interesting scenario where leadership's looking to get out, basically, and there isn't a clear succession plan. What do you do post sale? How do you manage that? What kind of operational challenges do those present?

Far and away the hardest part of it. As you know, when you're buying a business, there's often an element of secrecy and I wouldn't call it paranoia, but to some extent, the founder doesn't want to reveal or tell their employees that they're going through this sale process. And so you really have very little access to. To other employees in the business besides the seller. So a primary challenge is understanding who else is in the business, what their ability is to lead and take it in the direction that we want to go. And you hypothesize as much as you can, but ultimately you need to have a plan in place to say, hey, who are someone we can bring in? Or who are people that have shown a great track record with us already that are willing to participate in the new journey that we're going through. With this business. And that's everything from IT people to accountants to purchasing. Thinking about where does that business need to professionalize, where does it need the most help and do I have those people on my current roster to come in and lead, for example installation of a cloud based accounting system or develop standards and a competitive quoting process for direct material. It's a real quick evaluation of what do we think are the top priorities at the target company and do we have the right mix of people currently that could go in and work closely with a new team and put people at ease and go through the social process of being an effective change agent. Definitely hard to do. I do a lot of that myself. I've spent a lot of time working at the companies that we've acquired, leading projects related to IT and accounting and purchasing processes and cleaning up factories. Success activities. It's the fun but hardest part for sure.

It sounds like big thing is leadership in three areas you look to identify is within the organization. Are there folks that can step up into these key leadership roles externally if you need to pull somebody in and then also internally in your organization. Does that sound right?

Demeanor is a big part of it. You can imagine the sensitivity of one competitor buying another, the reluctance or the concern on the target company there. And who are the people that can go in and with credibility and with really just positive demeanor and someone who's not going to be a bull in a china shop and start to lead that change. It's a very interpersonal skillset, much more so than it is a technical skill set. But we're in a technical business. It's a fairly unique person that can go in and put people at ease while also getting a lot done.

How do you evaluate that? How do you know you got the right person?

Track record is a big part of it. So who are the people in the last, say year or two years are really showing a lot of promise in terms of just pure horsepower? Are they willing to put in the hours and ride the highs and the lows of grow a small manufacturing business? So I look for really horsepower above all else. I'm not big on credentials. I don't really care what age you are, whether you're late in your career or early in your career. A big part of it for me is your ability to work closely with people in a constructive way and your ability to bring a lot of horsepower to the table to do often benign and boring tasks that just require a lot of time. Let's do a value stream map of how a product moves through our facility. Let's migrate our accounting software over and do a back check to the old system. These are basics that aren't really that fun or glamorous, but just require a lot of time and effort from those tasked with them.

I like track record. Is there anything beyond that culture fits. Been the big buzz in the last number of years. You ever get that sense, inkling feeling this person's got a totally different management approach or we're just not going to get along or something that may be a deterrent?

Yeah, absolutely. We're a Midwest based company or a manufacturing company. So it takes someone with a high degree of cultural alignment to fit into these organizations and be well received. You can't necessarily have someone that's overly polished or maybe from a vastly different background. They're just not going to be able to establish credibility and conviction with the people that we're working with. And we really want people too that has ties and are rooted in the communities that we're operating in. Part of that is to just reassure people that we're not fast money, we're not in and out, we're here for the long term and the people that we're bringing in are people already affiliated with the area, affiliated with the region and share the same ties and convictions that they do.

How do you identify and grow talent internally to take on leadership positions at your companies?

It's harder at a small company. I've worked at big companies and I've worked at small companies. So a lot of the training programs that you might find in a large corporation, rotational programs, taking a year off to go do school and coming back, and those are just things that really aren't realistic at a smaller organization. And we try to give people an opportunity to change jobs maybe more frequently than would make sense from the outside, but trying to get people to cycle through a new position every year or 18 months, giving people an opportunity to go out the field and interact with customers and do the fun work of going into big time manufacturing plants and getting that exposure. I was just at a factory two days ago, took a person with us who was a software developer and had never been in a factory. I felt it was important for him to get inside and see what's actually happening at our customers and how product gets made. There's a cost and a commitment there to bring people along when it may be isn't necessarily optimal to do so. But I always trying to make time to bring potential leaders to meetings, to visits, to interactions that are maybe not core to their day. To day, but potentially could be, and just seeing how they react, seeing if they crave more, if they're happy continuing what they're doing, it's definitely a challenge. And in a smaller company it's maybe less structured than in a big company, but hopefully you find people who are there for the right reasons.

I guess part of it, they have to just learn from experience too.

We have a woman who now works for us that started out working in an IT function and then fast forward two years later, she's running one of our standalone businesses four states away and leading a team there and just doing a phenomenal job. And she was someone who was always requesting to do more and we gave her the shot and the opportunity and she's just absolutely outperforming and doing a spectacular job. So giving people a chance to succeed is a big part of it too. And you might not get that in a big company.

Let's take that person's example. How do you incentivize them to ensure business success?

A lot of the traditional approaches, tying site performance to EBITDA targets, revenue goals, maybe customer mix goals, but work really hard to define a compensation plan that is aligned with the broader company plan. Of course the, the PE sponsor goals as well. And I think that's a little bit unique. Unless you're in a PE backed company, you might not find at, at a smaller company you might not find compensation goals directly linked to profitability or some of these other business goals that we have for trying to motivate the site to improve appearance or clean up safety or something. We can tie in those goals as well, but try to make everything quantitative, numerical, realistic, achievable, all the things that go into a well structured compensation plan.

You mentioned earlier about automation as a significant trend happening right now. What kind of information or data are you looking at to guide you?

Yeah, it's incredible. What's happening right now in American manufacturing is fairly mind blowing and there's a lot of just incredible data showing what's happening and I feel like it doesn't really get airtime. I talked to a lot of people who are extremely well read and learned and up on current events and I feel like this is one of the major under the radar megatrends that's happening right now in our time. I would say that there's at least four data points that I would support here. Number one is robot density. So robot density represents how many robots exist in the manufacturing environment in a particular country per 10,000 manufacturing workers. So it's how many robots are working versus how many people are working. And the US right now is barely a top 20 automated manufacturing economy in the world. We lag certainly all of the Asian countries, Singapore, Japan, Korea I think is number one. China is way heavily automated despite perception compared to the us so we're playing major catch up to Asia. We're playing major catch up to all the European economies as well. So we're really in the first or second inning of our own automation journey. And there's a lot of reasons for that that I can talk about, but we're very early on. So a lot of the work that robots could potentially do is frankly simple. It's picking up an object from point A, doing one operation to it and setting it down in point B. And we're selling a lot of robots that do unbelievably simple things that just never got automated. And so you see that in what' called the Robot Industry association of America data. And you're seeing right now in certain industries, and certainly accelerated by Covid, you're seeing 80, 90, 100% increase in robot deployments year over year, which is pretty remarkable. This is physical infrastructure. And I can't really think of too many examples of physical infrastructure growing 80, 90, 100% a year over year. And this is a trend that seems to be accelerating. Reshoring is absolutely a real thing. Put aside whatever political statement you want to wrap around it. I think Covid showed the shortcomings of having a long and extended supply chain and the poor challenges. And you're seeing major investments domestically in new manufacturing. Just recently a major headline is what intel has committed to doing in Ohio. Intel is going to commit $20 billion to invest in a new chip fabrication plant outside New Albany, Ohio. TSMC is putting $17 billion into Arizona. Samsung Electronics is putting $15 billion into Texas. Just for cost reference, we're going to see in the next three years, we're going to see roughly $40 billion of investment by the semiconductor manufacturers that traditionally only operated in asia. And that $40 billion picture 20 NFL stadiums being constructed simultaneously in a five square mile patch of land across those three regions. So just enormous amount of activity happening in domestic, seeing wage increases driving people towards automation. $15 minimum wage is a popular topic. You're certainly seeing a lot of stimulus that is prompting companies to increase their wage rates to attract people to the labor market. I think Amazon.com right now is paying roughly $20 or $21 an hour to have people pick packages. And when you're paying people 20 or $25 an hour. Automation becomes a very appealing alternative. And then lastly, you have component prices are coming down. So cameras, software, robots, everything is coming down in price, as you typically see in consumer electronics. A camera that costs $100 today is going to cost $70 a year from now, and so on and so forth. So there's just an incredible number of tailwinds between where we're at in our automation journey. What's happening politically and related to reshoring, labor pool dynamics and then just technology gains. That's all suggesting that automation is going to continue to be a big part of the manufacturing world and I guess just broader society in general. If you look at what McDonald's, Buffalo Wild Wings and some of these other fast food restaurants are doing right now on their automation journey, that's going to be a remarkable trend. There's 10 million people who work in McDonald's and fast food restaurants every year. And that's a lot of standard work that is going to be automated very quickly as well. So fast food, all types of manufacturing, truck driving, you're about to see an enormous wave and a continuation of a wave that's been going on now for a couple years.

That was great. I feel like I got my lesson for the day. All out of that.

There you go.

I'm up to speed on automation. Let's talk chat about some of the challenges that you run across when you're doing these transactions. They're unique. You've already mentioned some of the leadership transitions, but what other challenges are you encountering?

Yeah, leadership transition is very difficult. You have again, an owner who is committed to the business. If you're going to own a manufacturing business in Ohio for 40 years, you've been through some wild swings, some ups and downs, some highs and lows. And for a lot of these sellers, their identity is the business. And so there's this major challenge of saying, okay, you've transferred ownership to us and we want to do things a little bit different. We totally respect and appreciate what has come before us, but we're obviously coming in with an opinion and a viewpoint of how to do a few things different and build on the greatness that has come before us. So there's a lot of challenge there of just getting that person comfortable. We like those sellers to stay around. They often have an incredible amount of valuable experience, sort of a sales Rolodex. And so we love when the sellers want to stay on, albeit in a different capacity, and still contribute, but just trying to figure out what's the right dynamic to involve them. How do we make sure that they're not trying to override or have issue with some of the change that we're trying to drive. And so that can be challenging. And you often find too that there's a lot of family members involved in these family owned businesses, cousins and uncles and nephews and just trying to understand how does the family who is still working in the business feel about the change and working through some of the feelings and I guess fiefdoms that you come across anytime you go into a small organization also you have to figure out are the people that are there, are they on board with some of the change that we're trying to drive? I would argue someone who maybe spends 20 years working at a plastic injection molding company in Ohio maybe isn't someone that's craving a lot of change and transformation and new approaches. And so we work really hard to understand what are the ideas that we think we should pursue. Let's solicit input from the people, the employees that are and let's go after ideas that have a consensus or a high amount of buy in. We're not trying to do anything too radical. We're not trying to upend what is a profitable business. We're trying to buy quality businesses and let's solicit ideas from key stakeholders and key voices within those companies and bring their changes to life. And we've had a lot of success in doing that. To go to a new employee base and say, hey, we met many times, we developed a plan, we're putting these three aspects of the plan into place. Here are the three areas where we've invested in the business according to the plan. We think the plan is working due to these three reasons that can be incredibly powerful and trust building within the employee employee base. Working through that and finding the right pace to work through that is very challenging.

Do you try any bottoms up approach where here's the things we're doing and creating the transparency obviously is a really important factor. But some of these folks maybe have operated in like a top down management and they have these ideas. But have you approached surfacing some of the ideas from whether the employees, middle level senior management that are part of the go forward of the business, that's.

The name of the game. The name of the game is getting in there on day one and learning what drives the business and where we think the opportunity lies. We're not experts usually in the business that we're buying. So getting in there, talking to people, getting them to confide in you, what do we think we need to do? It can be very simple things like, I remember at one business, the best idea or a common idea that kept coming up is let's improve the lighting in the factory. Let's give everyone work tables that are at the appropriate height. Someone saying, I can be 10% or 20% more effective at my job if I have good light and the appropriate height work table. And that's a very easy change to get behind, build goodwill. And it just obviously makes a lot of business sense as well. So these are not grand or complex or sophisticated changes. It's. It's stuff like, what are we showing on the website and why? How does our space look and feel? How long is a lunch break? Is there structure around that? How long does it take you to clock in and out? Can you review your benefits online versus in paper? And only. Most people want pretty basic things for the most part. And delivering on those and trying to do it in a transparent way is the leadership approach that we take.

What's those conversations like? Are there key questions you ask or what's the approach like?

I try to keep it very conversational. Right at day one, I'm walking around, I'm introducing myself, telling them who I am and what my background is. I have a humble background, a very sort of Midwest, I would say, earnest, easy to interact with, personality and talk to people and say, how long have you been here? What is it that you do? What opportunities do you see? And you're spending your first month just having that conversation over and over and trying to tease out what are the themes? What are the opportunities here for change? Who are the most vocal? Who do other people look up to as maybe the informal power leaders within the organization, and what do those people care about? So it's a very interpersonal and delicate thing. But again, that's the fun part of it, is to take other people's ideas and give them life and then show, hey, here's what we did. We're here to improve, not to. I think there's a concern sometimes when you hear private equity, they're going to sell off the business or strip it of assets and all of that, and there's a bad reputation there. So how do we show that we're here and we're committed to growing and investing and doing more.

It's interesting, despite the fact that you're in manufacturing heavy machinery, asset businesses, when you mention the challenges, you're primarily talking about people. Are there any big challenges you have outside of people?

It's all people. There's such a shortage of talented technical people in the Midwest where we're located. In manufacturing in general, I would say 90 to 95% of the effort in the business and not just early on, even day to day, revolves around making sure our best people are happy and that their ideas have life and are featured and trying to find that next group of people who can help us take it to the next level. So we are 100% a people driven business, even though our output is metal objects and robots and electronic circuit boards and stuff like that.

Let's talk about some of the lessons learned. The goal here in M and A science is try to learn for other practitioners, shorten the learning curve. When doing M and A. What are some of the big lessons learned that you think other practitioners should apply to their practice?

I think pace is something that a big lesson I learned. When I say pace, what I mean is you come in, you're excited, you've got all the energy in the world. You go into a business where perhaps the culture is to have everyone punch out at 4 o' clock and there might not be a culture of sending emails late at night or on the weekends like you might find in other businesses or other industries, and really making sure that your pace is in line with the existing culture of the company. Be there on day one and be bombarding people with emails on Saturday morning and Sunday morning and trying to get everyone to run at a. Maybe a pace that they're not used to is a great way to not make friends. I would think early on there was maybe an exuberance or an intensity that was an overall disservice to that relationship building and that interpersonal element that's so critical. Change takes time. We're not Facebook or Silicon Valley s startup where we can go from zero to a billion in one year or two years. We're a manufacturing business and it takes time to grow the talent, to get the talent on board with the vision and ultimately implement that. And so having a patience to get the people on board first before you do drastic things, I think can be a challenge for a lot of people who maybe are naturally very motivated, very hungry and fired up to do big things.

I like that. What are the big lessons you got?

For me, the value in very small improvements, right? Something as small as improving the lighting in a facility, improving the temperature, improving the tools available, giving everyone second monitors. It really is sometimes the simplest improvements and the lowest cost improvements that can have the biggest impact on how people view you and how inclined they are to go along with what you're trying to drive. Don't necessarily, I would say, get overwhelmed with trying to do something extremely ambitious or grand early on asking. Ask people how to make their day better and how to make them better at work and deliver on whatever they say.

I like this approach. I'm a big believer in the small increments. Essentially develop a culture of continuous improvement, being adaptive. I like your approach on giving people a voice. How do you get a culture change in that regard where you're acquiring a business that's pretty stagnant on the way they do things, especially when they have the operator who's done it 40 years. I can't imagine introducing new ideas on a weekly monthly basis. How do you get that moving in a different direction where people are like, whoa, my idea is actually being heard. Change is happening. I can contribute to this change and make some positive impacts in all different directions in various forms. How do you actually get that to happen?

It's tough, man, I'll tell you. A big burly welder with a ZZ Top beard esque and saying, you know, hey, something we really care about as a company now is a very clean and safe and bright workspace. And we expect every day that when you leave, your workspace is clean, bright and shiny. And there's no leftover cans or bags of chips or whatever. And half the time they say, hey, we agree. We all want a clean, bright, safe workspace. And the other half of the time, different words are used. I'll leave it at that. So people start to sort real quick. It's a good temperature check. When you say, hey, we're going to spend the first month here trying to turn our facility into one that we're really proud of, one that's safe, one that people and customers are excited to be in and not dark and dirty and dingy, which is what you find in a lot of manufacturers. And you'll find that some people just aren't on board with that. And that's a pretty good read right off the bat. That's probably not a person that's going to want to join long term. These small continuous improvement exercises, like you mentioned, are a great test to see who's going to be on board for some of the later innings. When we're trying to do things that are maybe more ambitious or more complex or require more effort, were they willing and excited and participating in the simple things?

What do you do with those stubborn people that don't want to change or do these things but you need them.

It's tough. You got to find the right balance. You can't be a bull in a china shop. And asking Joe the welder to clean up his area every night. Again, you got to toe the line there and figure out how hard am I going to push here. I really need Joe. He maybe keep a dirty work area, but he's a hell of a welder. And we want to make sure that Joe is around. So it's leaning in and out just based on how much pushback you're getting and trying not to be too abrasive along the way. So that's the art for sure.

Makes sense.

We have to have you out. We'll have to get you out of the podcast seat here at some point and get you into the factory and get you into a weld cell to see how it's done.

Yeah, that'd be fun, actually. Get a day with Dan and see what it's like.

You'd love it. It's a blast. People love to be in factories. I think people's work right now is so virtual and it's just so, like, abstract that I find when I take in friends or customers or whomever and take them into a factory and let's weld two pieces of metal together, like, let's grind down this. Or let's run these hundred feet of wires through these tubes and connect them on the other side. People get a lot of joy and fulfillment out of that. People of all walks of life. And that's the fun part, is having a tangible work product at the end of the day. So I love a day in the factory and getting away from the computer and the email and the phone that we're also tethered to.

That was the one thing I definitely miss about doing advisory work, was being on site and actually visiting these companies, which I guess even that's becoming more limited, too. That was the fun part. That was just seeing how things come together, what operations look like, and just seeing how it's radically different company to company, end to end.

Spot on. That's the fun part. So we'll have you out whenever you want to come.

I'll take you up on it. What's the next five years look like for you?

And Eckhart Automation is booming. We were actually just bought by a larger private equity group. They bought into our vision and we're really excited to continue to invest in the existing business. Definitely buy some more businesses that we find attractive and end markets that we find attractive. So industries that we're really excited about alternative energy. Right. We're starting to see the alternative energy boom that's happening. Battery technology, battery storage, medical devices with the emphasis on geriatric med devices, wastewater treatment, water treatment equipment. There's just so many different industries, E Com logistics and warehouse fulfillment. So, so what we're going to try to do is find businesses like us in these high growth verticals, buy them and continue to be able to offer more to our customer base as well. So I think the US relative to say South Korea is probably in the third or fourth inning of our journey now compared with the second inning five or six years ago. Huge opportunity to continue to automate the most basic of tasks that people are doing every day. I saw something the other day from 3M that there's roughly like 25,000 people in the United States whose job every day is to come in and put double sided tape on the inside of plastic automotive parts. You go into your car, your entire car is filled with plastic parts that are taped together and behind every one of those parts is someone using a manual tape roll to put the tape down on the plastic, peel off the backing and stick it onto a car or truck. And it's enormous. So what is the opportunity there for tape automation equipment or adhesive automation equipment? And we're really just, just doing basic activities right now that I think if you were to watch what our installations do or the deployments that we're doing are wholly unimpressive when you see the output putting two plastic pieces together. But that's the current state.

You're absolutely right. You're getting me excited. Start thinking more ways to automate M and A.

There you go. Absolutely.

What's the craziest thing you've seen in M and A?

Going back to this idea that people get very emotional about selling their business and rightfully so. I totally respect that. If I'm lucky enough to have built, built this business for 40 years for my entire life and if I one day go to sell it, that's probably a very emotional and important event to me. So I don't lose sight of that. But when you are on the other side of the table, people with very interesting requests that reflect maybe the non financial aspects of their decision making. And I can recall one business owner who maybe wasn't price sensitive, wasn't trying to eke out every last dollar. But what was very important to him was a reserved parking spot in perpetuity in the company parking lot with a sign that indicated that this was his parking spot. That was something that he felt needed to be, you know, written into the deal docs and written into the contract and was of utmost importance was this dedicated parking spot with a very fancy milled sign indicating that this was his spot forever and ever. We oblige. Yes. Sounds good. We'd love to give you the best parking spot, whichever parking spot you desire. It's make you the best sign we can possibly make and fulfill that request. We would love to. Wow.

That's a fun one.

I don't know where it lands on the craziest story meter, but I think it just really speaks to what happens when you're buying a family business from a founder and owner. It's very representative of that dynamic.

I like it. It's an interesting way to keep the namesake around. I'm going to have to think about that as well.

Yeah, absolutely.

Awesome. Thanks so much for the time Dan. I appreciate this conversation and learned a lot from you today.

Yeah, appreciate it man. Fun time and look forward to catching up in person at an Eckhart factory somewhere.

Let's do it. Cheers. Here's to the deal.

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