acquisitions, business, esop, company, thought, furnaces, people, engineering degree, industry, big, grow, owners, leaders, pennsylvania, run, plant, years, knew, started, onyx
Ashley Walters, Damon Pistulka
Damon Pistulka 00:03
All right, everyone, welcome once again to the faces business. I am your host, Damon Pistulka. And boy, do we have a show today, which means with me today, not wish me with me today. I have Ashley Walters from onyx, Incorporated. Is that right? So President of Onyx? Awesome. Ashley, great to have you here today.
Ashley Walters 00:27
Yeah. Thanks for having me on, Damon.
Damon Pistulka 00:28
Yeah, we’re gonna be talking a little bit about growing family businesses through acquisitions. We’re going to talk about your background, your history with the company, you guys decided to use an ESOP, to sell your company into an ESOP A while ago, I don’t know if the right way of saying it, but we’ll talk about that. We’ll talk about your idea and why you’ve chosen to grow through acquisitions and some of the things that you’re finding aren’t doing that. So actually, tell us a little bit about your background and yourself.
Ashley Walters 01:02
Yeah, sure. So I grew up in a very small town in Tennessee, and I come from a multi generational manufacturing background. So grandparents worked in manufacturing as well as my father. And you know, that first plant visit I went on the sights and the sounds, it just sucked me right in. And so it’s been in my blood since I was 13 years old, if not before, went on to obtain an engineering degree from Auburn University in a very small town in Auburn, Alabama. So that small town, just kind of a small town girl right at heart for sure.
So got the engineering degree, went to work in nucular power. And then my father in law called one day and said that they’re Pulp and Paper technical salesperson had passed away unexpectedly. And so wanted to know if I was interested in the job. So just so happened, that kind of my minor in college was pulp and paper, and my dad worked with a paper mill and my grandfather worked in the paper mill, so I knew a thing or two about it.
So, I ended up with a job in technical sales and started helping my husband drew run the southeastern division of the family business. And we went on to have two boys and our first one came six weeks early. So I went from a working mom to a stay at home mom literally overnight, and went on to have a second baby. And then my father in law called again one day and 2013. And he said the CFOs left the company and he needed me to run it. So that’s a quick rundown on how I got to where I am today.
Damon Pistulka 02:34
Very cool. Very cool. So whereabouts was that that you went? I used to live in Tennessee, so ask us.
Ashley Walters 02:43
Yeah, so I grew up. I grew up in Riceville, Tennessee, which is just south of Knoxville and just north of Chattanooga by 55 miles.
Damon Pistulka 02:52
Yeah, I was gonna say it was much better than East Tennessee. Yeah. That’s beautiful out there. Is sure as I live, I live near Jackson. So as Western dentists, that’s the other side of the state, the other side of the state. And that’s not quite as pretty still rolling. Still got some trees, but not nearly as pretty as the Chattanooga area. So very cool. So pulp and paper, what is it? That’s, that’s quite an industry. So when you look at it, and you see just the vast amounts of timber that move that power, all what we use every day. What are some of the things in that industry that you really just realized getting into it anyway? Wow, I’d never thought of this.
Ashley Walters 03:41
Yeah. So every time I talk about pulp, pulp and paper, I say, you can’t tell me it’s not a really super cool industry. We took a pine tree and turned it into toilet paper, you know? And so yeah, lots of chemistry involved. For sure. My background was chemical engineering. But just that process of manufacturing something of turning something into something else. Just always been drawn to.
Damon Pistulka 04:08
Yeah. So cool. So cool. So your father in law called again, said, Hey, come and run the company. Mind what he
Ashley Walters 04:23
did. Now is not the right time. What’s the first thing that went through my mind? My boys were two and three years old. Oh, my goodness. Yeah. And we lived in Charlotte, North Carolina. And the company headquarters was in Erie, Pennsylvania or is in Erie, Pennsylvania. And we also had a location in Pittsburgh, Pennsylvania. So certainly not ideal to try to run a company from nine hours away.
But I just knew in my heart You know, I talk a lot about having grit and grace. I think that’s something that being raised in the south, it was kind of ingrained in us, right, that determination and perseverance as long as well as some empathy and compassion. And so I really went back to those roots and grit. And I just knew I had to say yes. And it wasn’t because of my family so much as it was because of the 50 families that were working for the family business, that were depending on us to get this right to fix this for them. And I didn’t know how I was going to do it.
Once again, I have an engineering degree, I didn’t have an MBA, I didn’t have much management experience. But I really thought about the advice that my dad had given me when I got my engineering degree. I had the Diploma in my hand, or taking photos and everything, and dad’s, this is great, but you don’t know much at all. And I thought that really stinks. It’s been four years obtaining this degree and what he was, he’d spent his entire life as a production person, you know, and he had management, what he called white hats, that would come on the plant floor and tell him what to do.
And even when he knew that it was wrong, and he knew exactly what was going to happen, they wouldn’t listen. And so he said, Go to the people that are closest to the work and ask them, they already know the solution to the problem that you’re trying to solve. And if you’ll just ask and listen and get them the resources and help remove the obstacles. You’ll be so successful. And I Damian, I took that to heart. I mean, I’ve done that and every position ever since. So he was right, I really didn’t know much at all.
Damon Pistulka 06:44
I just want to stop there for a minute. Because your dad probably possibly right there gave you the advice to to make any career. Yeah, I absolutely fracturing. It really is because going to the people closest to the to the work and asking them what’s wrong? And how would they solve it? And just getting them what they need is 99.9% of what you need to do. Yeah, and
Ashley Walters 07:07
I think a lot of leaders feel like they have to know everything, right? And it’s just impossible, and you’ll completely stress yourself out even company owners, right? When you grew the company up, you didn’t know everything. But as you grew up, there was a day when you didn’t know everything anymore, you had to rely on others.
Damon Pistulka 07:29
Yes, I think I think sometimes, it’s even better. If you don’t know, if you if you somehow get like you getting thrust into a situation where you may not have known all this stuff is actually an advantage. Because you can ask the questions that are so called dumb questions. And then you’re more reliant on others right away from the beginning? Because you don’t know.
Ashley Walters 07:55
Yeah, absolutely. So I read an awesome article the other day, and it was talking about how, in these organizations if you’re, if you’re trying to take a coach approach with people, but you as the leader aren’t asking for help, you’re not modeling the behavior, then you’re not going to have people asking for help within the organization. And I thought, well, that nailed it. Right? Yes.
Damon Pistulka 08:18
Yes. There is a question that somebody told me. Similar to what your father said years ago, it’s said, always ask somebody, what are they think, because of their common human problem, and they’re talking about problem? Well, what do you think? How would you do it? And when I was early in my career, I thought I had to know. But once you make that shift, and you start asking them what they think, a first of all, you weren’t going to come, I wasn’t going to come up for that good a solution in the first place. But by empowering people and asking their opinion, the next time they might solve the problem on their own without even asking and do it just like they need to.
Ashley Walters 09:01
Yeah, I do think you find people, especially when you’re moving from that command and control that we see a lot in manufacturing. As you’re trying to move to this problem solving culture. You definitely go through stages. So at first, they’re frightened to tell you anything, because they’ve been belittled or berated, potentially, if they have said anything before. And now you’re asking their opinion, they’re not real sure what you’re going to do. Then once you get through that stage, they start offering their opinion, but they’re, they’re wanting you to solve, right?
So they give you the problem, but they want you to solve for it. And then as you said, when you ask them, Well, what do you think, then they become involved in the solution. And then before you know it, they’re not having to bring as many problems to but one time I did have a leader come to me and she told me about an issue. And I automatically went into problem solving mode and I didn’t realize you were beyond that kind of stage and She said to me, she said, just stop actually, she said, I’m just telling you, I’m venting and bringing it to your attention. But I would like to go try to solve it. And I was like, have
Damon Pistulka 10:11
at it. There you go. You know you’re doing something right. That’s awesome. That’s awesome. Well, we got confused. People are just want to say hello to bonita. Hey, Bundeena. Great to see you. And then we got Margo, cargo, Margo, all the way from Long Beach. Thanks so much. And then she’s, she says, love the story. Awesome. So your background chemical engineering, were working in that you started running the company? Let’s talk about your book, because you were leading with grit and grace. What I mean, you’re sitting here running the company and decided to write a book, but not enough to do be more tired today. Well,
Ashley Walters 11:00
you know, I got a little free time. I don’t know if you remember COVID-19? Yeah. World down. Yeah. So we weren’t traveling as much. And you know, we were just hoping more and there was more free time, I wasn’t running the football practice, and basketball practice and all those good things with the boys. So it was actually the perfect time because I can tell you right now, I don’t have the capacity to put into writing. But my marketing coordinator at the time said, Ashley, you have a story that I think others would like to hear and could find helpful.
And she said you let people let their two crisises one internal to your own family business and one external being the global pandemic. And I looked at her and I said, as a general rule engineers do not right. It’s not. It’s not a skill set that we generally have now we can write technical papers and things like that. But you know, not something that the world necessarily wants to read. Right? Yeah, valuable. And so anyway, I don’t remember how she convinced me to do it.
But I said, maybe this is, you know, something, I could give a shot. I love to read, I love to read what other people have written. And you don’t find too many books that apply necessarily directly to small to medium sized businesses, right. They live stuff written for corporations and big by, you know, big management firms and things like that. But we have a lot of nuances in these small businesses. And so I just thought if I could share my story and my roadmap for how we made it through to crisis’s, then if one person found it useful, then I consider it successful. So I wrote it.
Damon Pistulka 12:42
Awesome, good stuff. Well, what did you learn about yourself and about the company and the way you solve problems as you were here as you’re going through writing the book? Yeah. So
Ashley Walters 12:53
one thing I realized about myself as I’m a definite overachiever, and I’ve set really strict timelines for very large projects. I don’t know anything about writing a book, I had a great team of people behind me, you know, who knew that there was a designer for the inside and you know, of the book and the outside of the book, and that there wasn’t just one editor, there’s three editors. And so I just learned a lot about the process. I said, I wanted to publish it by December 1 of 2020. And I started in September of 2020. And it went live on Amazon on December 8 of 2020. So I think seven days in the midst of a global pandemic, and me not knowing what I was doing was pretty good.
Damon Pistulka 13:40
You gave yourself a little bit of grace, then yeah. So definite over a year, what are some of the other things that that you learned about the situations that your company had gone through your leadership style, some other things that you didn’t realize, because I gotta believe this gave you some time to really reflect? And remember,
Ashley Walters 14:04
it definitely did, it gave me time to reflect on the process that we took to kind of get from there to here, right. And so it gave me the opportunity to write that roadmap. And I wouldn’t, without the reflection time, I couldn’t have told you kind of the steps that we took and which pieces were important and kind of where we made the errors. So I can say, you know, as we went into this, it was kind of sheer chaos.
And we had this these company financials that were a mess, and we needed to do some things quickly. And so there was a lot of changes that happened fast, and we did not do a good job of communicating the changes and why. So, you know, moving forward, we’ve, we’re more cognizant and tried to communicate, okay, this is the change we’re about to make, like, am I not thinking of something that’s going to impact the person
And in front or the person behind in this process. And just talking through more as a team and collaborating more mean, we had been completely siloed, the business units didn’t know what the other business units were doing departments didn’t know what the other departments were doing. And so we had to learn to communicate, again, as a team. So just, you know, just reflecting on things like lean Value Stream Mapping was the tool that we use to really start those discussions again.
And from Value Stream Mapping, we went into five s where we just clean the place up literally, like cleaning the carpets painted the walls, like throughout the junk. And it just, you know, they’re just steps. But you what we did also learn is, we had too many priorities at one time. And so when I reflect on what my performance review looked like, I had five big goals, and they had five baby goals. And there was no way that I could complete 25 projects in one year, when 90% of your day is task oriented, right? The change I made in 2018, was we started with just one wildly important goal.
And that way we could there’s tons and tons and tons of great ideas, right, but we just had to pick one to focus on so that we could feel really successful. And what we found was, you know, the goal for 2018 didn’t go away, it’s still a focus point for us. But it’s a nap more of a natural habit now. And so then the gulf between 19 Wasn’t overwhelming. The goal for 2018 we just we had the natural habits and the good cadence. And then 2019 became the thing that we learned and we tried. Yeah. And it just felt really cool. Yeah, that really helped us to be prioritized.
Damon Pistulka 16:54
Focusing is too many priority priorities. So you just cut them down to one, one biggest and most important one,
Ashley Walters 17:04
what is the one thing that we can do that will be the most impactful to the business? Just one, and I read wants to that the product like priority was never meant to be plural, it is only meant to be singular? One a
Damon Pistulka 17:19
priority. Yeah, that’s, that’s awesome. Because we know how good multitasking really does work. You know, you only kind of have to,
Ashley Walters 17:30
I was gonna say I have a bunch of half things done.
Damon Pistulka 17:34
And I forget the other two. And I’m trying to do that. So you it’s super interesting, because you’re talking about a 50 year old company, right? When you got there, it’s already 50 years old, I had a similar experience, I started working in a company that was a little bit older than that. The siloed things that were were typical in companies before, you know, the accountants didn’t talk to the engineers and didn’t talk to the customer service. People didn’t talk to the production, or the people working in the factories or working on the job sites. How difficult was it to get people to learn just to communicate
Ashley Walters 18:16
with each other or with me, or both with
Damon Pistulka 18:19
with across the silos with you, rather than just kind of doing their own thing.
Ashley Walters 18:26
So the way I got him to start communicating with me and trying to build that trust and report back was just asking the question, what frustrates you the most, or what takes up the most time in your day. And that really helped me like figure out kind of what was wasteful, because if they weren’t feeling like anybody was looking at that report that was 50 years old, which nobody was, you know, it felt like a waste of their time.
And so we just started eliminating those things just you know, as quickly as I could, as timely as I could, getting them the resources, helping them remove those obstacles and barriers. And if it was ever something that we couldn’t change, for instance, we are a supplier into the aerospace industry.
So we have a process that we simply cannot change, even though they have really great ideas surrounding it. I just say those are awesome ideas, but we can’t change because, and we will talk through it. And then Value Stream Mapping was really the way that we got each other collaborating, because then you were talking to the person in front of you and behind you in a process and you were saying, Okay, I if I could do this, would it make your life better or worse, you know, and that we’re getting to have those conversations as a team. I’ll also tell you, I did not sit in on the value stream mapping processes.
So I don’t know who gave me advice pretty early on, but they said and it might have been the facilitator for value stream mapping. He just said, I find it’s better when like the owner or the president or the head isn’t here, because they won’t speak as freely And so even to this day, I don’t sit in on like our health benefits talks. I don’t sit in, you know, when people are trying to brainstorm, because I don’t want them to listen to my ideas. It’s not, it’s not the Ashley show, right? They have the answers. And so I just excuse myself and like, get debriefed afterwards, but let them brainstorm on their own.
Damon Pistulka 20:22
Yeah, that’s a great idea for the value stream mapping. I giggled when you talk about five s because I was in the in companies when five s started to come and we weren’t, we had a large Japanese supplier and the first company I worked for. And it was a traditional older industrial company and dirty, you know, the old manufacturing kind of thing. And everyone thought five s was crazy, right? Well, why do you want the floors so clean?
Why do you want things that organized, and you know, you can take it to the extreme having your desk or you know, super organized in your, in your office supply room and stuff. And we did in a lot of cases. But I laugh about it, because now the benefits of it are so well known, and so well documented that it’s weird to go into a place and not see them very clean and very organized.
Ashley Walters 21:18
And I would say that we do a good job, but we’re not. We’re not your world class at it. Oh, yeah, we were still, you know, on our Lean journey. But we find ourselves you know, COVID kind of rock the boat, we were doing great. And then COVID happened and we had less people in the plant and you know, more production to do and all those good things and lean and five asked specifically it was kind of that thing that got pushed to the wayside.
But as soon as we were coming out of COVID, and everything was like kind of turned around, it was the thing that we desperately wanted to go back to and get entered. It’s centered us right, as a company, it brought everybody together. And, and everybody was working for that same common good. So sometimes you can lose your way. But it’s okay. Right? It’s kind of like, yeah,
you’re right. You’re going to one day,
Ashley Walters 22:17
it’s okay. You can start over on Tuesday.
Damon Pistulka 22:19
Yeah, yeah. So you’re leaving the company turns that you write your book, you turn things around. So when did you guys it wasn’t before COVID Or Africa. What do you guys decide to do the ESOP?
Ashley Walters 22:35
Yeah, so remember when I said I’m an overachiever? Yeah. It was in the midst of COVID that we decided to go
Damon Pistulka 22:41
That’s because thinking that the timing through my head. So what, what was your reason reasoning for doing doing these?
Ashley Walters 22:55
So John and I, when we purchased the company from his dad in 2018, it was a four year process of meeting with advisors and trying to figure out the best way to transition this business, and what do we need to do and you know, it’s emotional for the seller, it’s emotional for the buyers, it’s hard on the organization. So we just knew when we purchased the business, that we wanted to be really thoughtful about how we would exit the business.
And so statistically, if you know anything about third generation, family owned businesses, they’re only 13%. Successful. Yeah, regeneration. And so being the engineers that we are, we decided the statistics seemed like they were stacked against us. And so we knew that it was even more important to not just rely on our boys to be that third generation. And currently today, there are 10 and 12. And one wants to be a shoe designer for Nike and one wants to be an aerospace engineer, neither of which are grayed currently be helpful for the family business.
Yeah, I know, that can change 100 times over but, you know, we just we just knew that this was something that we would face down the road. So in 2019, I sat on a succession planning panel, and I was there just to talk about going from first generation to second generation. But Kevin McPhillips, from the Pennsylvania center of employee ownership was there for the keynote. And so I stayed for the keynote.
And he just it was just amazing the stories about these ESOP companies that he told, and so I grabbed him at lunch and asked him a few questions. And I wanted to know, what does Onyx have to look like for this to even be a possibility for us? Because it wasn’t a possibility for us when we were transitioning from the first to the second generation. And so I kind of told him, you know, what we’ve been through and where we were, and he said, Actually, I think you’re there. And he said, If you’re not, you’re really close. And so we had a high level feasibility study done.
This was the beginning of 2020 as we close the 2019 books, and Kevin came in and he spoke to our leadership team on March 9, right before the pay endemic, right? And he and I wanted him to answer all their questions. And I wanted them to know what we were up to. Because tively small company, I didn’t want to rumors find that were small business, you know? And if they did, I wanted them to be able to squash them. Yeah, sure. Yeah. So, and then the world shut down on March 13. And so one of my leaders came, and he said, Well, I guess this means an ESOP is off the table.
And I said, Well, it was a good idea in February, and it still remains a good idea today, it’s good for the business. And so we’re just gonna forge ahead, we’ll just see, you know, what we can do? And at that time, it was a two week shutdown, right. It was a flattening of the curve. Like it wasn’t a two year expedition that we’ve been on. So anyway, Dread, I just thought it was a really cool idea. Because for us, it meant like kind of our family culture reimagined, that family ownership reimagined for us.
And we wanted to, we wanted to ensure that this business, who has now been in business for 56 years in Erie, remained for generations to come, not dependent on our family generations, but really dependent upon the hard work of the people who are showing up every day, right, we wanted to get back to them, we want to make sure we remained in the community. And so for those reasons, it just was a good fit for us now, and Aesop’s not a great fit for everyone, you know, you have different goals.
Sometimes those owners are relatively young, we, you know, a tenure buyout for us is no big thing. We’re still managing the business, we still get to be involved in the growth. But you know, other owners might not have that timeline, right. Or they might need that money to retire. My father in law was one of those he needed the money to be able to retire. These small to medium business owners seek everything that they have, yes. into the business. There’s not a big 401k account sitting around. Yeah, the business is the 401k. So yeah, everybody’s goals are different, but for us, and ESOP was great.
Damon Pistulka 27:01
Yeah. Well, and I like what you just said, though, you said family ownership reimagined. Because it’s kinda like your family just got bigger. You know, when you think about family ownership of the business, because the employees are the owners now, they do better if the company does better. And that’s, it’s a much different environment for people to work to I can imagine.
Ashley Walters 27:30
Yeah, so they, I think one of the things that we saw early on was the self policing. So when Johnny wasn’t doing his job, like Bobby wanted Johnny to do his job. Yeah. You know, that going on?
Damon Pistulka 27:44
Yeah. And it is it is, it is nice if you have the time to do it. There’s some other Aesop’s I’ve been involved with where the 10 year buyout is common in ESOP, but it is a nice way to do it, because you can still be in the business for a long time and still affect the future of the business and do that. And, and then as we look forward to the future, like you’re doing now, the ESOP really prepares you for something like growth through acquisitions like you’re trying to do now. So what I mean, what really intrigued you about or cause you to make the decisions, Hey, we should go out and buy other companies. That’s how we want to grow our business.
Ashley Walters 28:29
So we’ve been growing organically, really well. But it’s hard to grow organically past a certain point or as fast as one might want. Right. So that was kind of the draw for acquisitions. The other piece of it is, I think there’s a lot of small to medium size family businesses out there that just don’t know where to go or what to do.
And so we want to offer, you know this as an alternative for them. Maybe some are scared of private equity, they don’t know what’s going to happen to their business, they want to make sure their legacy remains intact, their business remains in their community. So knowing that we are an ESOP company, and that that’s really important to us, like where you have those values that are very much aligned with the kind of the business owners that we’re looking for. So we’ve reached out to, you know, several different companies over the last couple of years. We haven’t made any acquisitions yet. There’s some nuances when you’re an ESOP.
Right? So we have to be thoughtful that we don’t dilute our current ESOP owners. So not all companies make sense for us. So if you have a very heavy like labor intensive manufacturing business, then it’s probably not going to be the best fit for us because we’re more service oriented company. So you kind of have to look at that revenue per man or EBIT up per man, and make sure you’re not diluting those current owners or employees, I should say.
Damon Pistulka 29:54
Yeah, yeah, that’s, that’s interesting. So you were you were The your intention is you’re going to be able to grow faster through acquisitions, and offer the owners a different legacy choice,
Ashley Walters 30:10
offer the owners of different legacies choice. And yeah, and we’ll still grow organically as well. But you know, through acquisitions, we’ll be able to maybe diversify in a region, or offer our clients more services.
So for instance, if we took on a mechanical arm or an electrical arm, you know, we’re seeing a lot of the plant personnel for maintenance. They’re just not there anymore, right. And so outsource maintenance has become a really big thing, because the plants only have so many personnel and they need every single one of them for production. So any way that we can grow that would benefit our current client base, I think would make a lot of sense.
Damon Pistulka 30:48
Yeah. So this backup again, because I just realized that we didn’t take much time to talk about what Onyx. I think it’s cool. I think it’s really cool. Yeah, what is the company actually do?
Ashley Walters 31:02
So we build and service industrial furnaces? So these furnaces are in your steel industry, aluminum industry, not your H vac furnaces at home, those are not what we would do. But just think of furnaces as big as your conference room lined with refractory on the inside and that have air piping and natural gas piping on the outside for the combustion. And we maintain that the combustion system as well as the refractory systems and we build brand new furnaces. A lot of what we do is retrofit or remodel, you know, current furnaces, but we do build new ones as well.
Damon Pistulka 31:40
So what are these furnaces doing? Usually? Yes, a
Ashley Walters 31:44
lot of what we’re involved in is the Forge industry. And I always just call it specialty metal, some kind of alloyed steel, that they’re turning into defense or aerospace, oil and gas automotive parts.
Damon Pistulka 31:57
Okay, well, it’s feeding heating the metals up and helping them change the properties. Something like that.
Ashley Walters 32:04
Yeah. Just think of a blacksmith. That’s what a forge is, right? So they’re putting the metal into these furnaces. It’s glow in red heart, they’re taking it out, they’re putting it in a press or a hammer, okay, and making it forging it into some shape. And then heat treating it after the process. Maybe they machine it, and then they heat treat it. But yeah, it’s just super cool stuff that we don’t even know what’s going on behind these walls.
Damon Pistulka 32:30
No doubt. So. So you build the first is actually turned a metal like red hot before they form it? Yep. Oh, yeah. That’s really cool. That’s really
Ashley Walters 32:42
a supply chain. Yeah.
Damon Pistulka 32:43
And that is, I mean, I love seeing the videos of that type of metalworking, because it’s, it’s so it’s a, you can only imagine the heat around there. But it’s so interesting how you can form the metals and keep different properties by doing that. So that’s cool. That’s cool. So you’re looking to grow by acquisitions. Now, growth by acquisitions has been done horribly, in the past, in some cases. What you’re thinking you’re looking more at things vertically, that kind of helps your current customer base more, that’s those are the kinds of things that will complement you better.
Ashley Walters 33:23
Yeah, I think for us, especially going into acquisition, number one, something that is within our knowledge base right within that customer base, definitely feels the best to us. So that’s not to say that we won’t grow the company and other ways or diversify and areas. But yes, many acquisitions don’t go as well as planned for sure. And I think a part of that has a lot to do with like the culture of the company. And trying to integrate two cultures. That can be super tricky. Not that it can’t be done. There’s been people out there that do very well. But I think getting that right, is probably one of the bigger steps.
Damon Pistulka 34:04
Yeah, yeah. And I think too, you got a distinct advantage. And this is because you’re looking at it from a business perspective. Yes, you’re also going to be reviewing financials, but a lot of the bad acquisitions and mergers have taken place just because they’re purely financial. Yeah. And that, that you’re, you’re looking at that secondarily.
Ashley Walters 34:27
Yeah. I mean, it’s certainly like a long term game for us. Right. And every stakeholder is important. It’s not just financial play.
Damon Pistulka 34:37
Yeah. Yeah. So what have you learned so far? You know, thinking about growth by acquisitions? What’s been something you said I would have never thought of that.
Ashley Walters 34:47
So I think the biggest thing that we figured out pretty early on was the number of people and the dilution. So we looked at two different companies that were heavier in personnel. To kind of produce less EBITA, and we realized that we weren’t going to be eight. So if you can grow the company substantially and keep the same amount of personnel, then it makes sense, potentially, right. But we realized, as we grew the company, as we grew revenue, we were going to need more personnel to do it. So it just didn’t make a lot of sense.
I think also, you know, I guess I would have assumed that when you reach out to business owners, they might be excited that somebody’s reaching out and wants to buy their business. And so far, I don’t think that’s been the case. Right? They’re not they’re caught off guard, they’re, they haven’t thought about it. But I think it’s also just planting that seed. This is, hey, we’re here. We’re looking, you know, it makes sense to us for these reasons. One day, if it makes sense to you, give us a call.
Damon Pistulka 35:48
Yeah. Those are the those are two great things. I think, first of all, you understanding the ratio of employees or dollars of EDA, EBIT up per employee, whatever that number is to give a quick understanding of, hey, this industry might not this segment of the industry might not be a good one for us. That’s great, because it allows you to get quicker to more acceptable candidates.
And then learning to the business owners are caught off guard they, they’re in running our business, they’re not thinking about the next five years or the next five minutes, really in some instances. So that’s cool. Yeah, yeah. So what, what are some of the things? So I’ve got about 17, things that are running in my head all at once, I just need to slow down here. So what are you looking forward to in the next year? With the business with your growth by acquisitions? What are some things that you’re like, Man, I’m pretty excited about this.
Ashley Walters 37:02
So I think some of the most exciting things going on right now is just we have an incredible leadership team and growing these leaders for succession is really super exciting. Just watching these leaders take shape, and grow. I also think that you know, I guess, like, while recession is looming, potentially, or is here, as some would say, I feel confident that because we’ve led, like, we have been through to catastrophic events together as a team, like, I just know that we can get through anything, and we’re gonna be, we’re gonna be okay. I’m not gonna say it’s easy.
But I just Damian, when I pulled the team together when COVID-19 happened, and I sat them all around the conference table, and I said, Okay, I’ve been up all night long. And these are the things I’ve thought of this is what I know that we need to do to keep everybody like healthy and safe. What would I forget? What did I not think of, there wasn’t a person in that room, that didn’t tell me something that we needed to think about. And then because they knew that it was the issue, they took it and ran with it. And that just feel so good as a leader not to be on an island by yourself.
Damon Pistulka 38:28
Yeah. Yeah. That’s awesome. That’s awesome. I think back to what you said, the first thing you said while you’re excited about growing these leaders for succession. And they didn’t mention that before. But your thought about the your exit of the business when you went into the business?
Wow, I gotta tell you that is very rare, first of all. And I think it’s super cool, because you’re seeing what we get to see with some of our clients as we help them create what their exit is, and we’re still years away from it. But when you see that, what you’re going to do what you want to do before you’re there, it’s not like something you fear, I don’t think it’s something that you’re like, Man, I’m excited to get there.
Ashley Walters 39:24
Yeah, but I do think like, as we talked about, these transitions are emotional like, oh, yeah, emotional divide the business it was emotional to sell the business is a little bit emotional. Train these guys and gals up to do what you’re doing because then what are you going to do? Right? So then you got to find that next step for yourself? Yes. Okay. Sometimes can be the trickiest of them all.
Damon Pistulka 39:48
Yes, yes, it is. I was fortunate enough to be in that position one time in my career. And I’ll tell you that what it allowed me to do was to think Got a completely different way to run the business that transformed it. If it was not the details, it was the overall, I just went down. And I said, if we solve this, and I, it’s funny you say that if we solve this one problem, we will change the way we operate in the industry. And I brought the team together.
And over the course of two years, we were able to do it. But just give me a little bit of seed. Just a little seed for thought there. Because I think I don’t think I know you’ve got that inside of you. And that will that will come out because growing that leadership team is so it’s such an awesome feeling like you said, but then it empowers you, and pushes you to see what you can do that’s even bigger than you’ve ever even imagined today, which is so cool. I’m so excited for you. Yeah,
Ashley Walters 40:54
that’s cool. But they’re racking.
Damon Pistulka 40:57
Yeah. Oh, no, I’m not saying it is that hard. That’s a that you’re not gonna be frustrated, any of that stuff. But it is incredible, incredible that you guys are able to do this. And so with that being said, Are you guys back to your growth by acquisitions? Are you looking at you’re trying to stay geographically in the Pennsylvania area you’re seeing in the Northeast? What do you really think in there? So we can talk about that a little bit?
Ashley Walters 41:24
Yeah. So I think once again, going back to acquisition, number one, it would feel good to have it close by just because I think it’s going to what I believe it will need to happen is that integration process and I think we’re going to have to build that integration process the Onyx way. And so if it’s closer to us regionally, that makes that a lot easier. And once we have that integration process, we’ll kind of have a better feel right? To how to scale as
Damon Pistulka 41:53
good, good. So we’re, we’re getting near the end here, I want you to go. Okay. Give me your perfect acquisition number one, you know, as much as you can tell me about it, because someone was listening, and they’re in acquisition. Number one, I want them to really reach out to you.
Ashley Walters 42:13
Yeah, so I think the closest I can come to acquisition number one would be probably the mechanical like side of the business, or the electrical side of the business. Those are two areas where we find ourselves called to do more and more work. And while we have expertise on the team, we just don’t have as much expertise as we could use. I think that those two would be make the most sense.
Damon Pistulka 42:42
And those are mechanical, or electrical service companies that are dealing with in the forging industry,
Ashley Walters 42:49
I would just say in the industrial industry, like manufacturing industry, it wouldn’t have to be specific to forge because if you think about your mill rights in a plant, they can fix all sorts of mechanical things.
Damon Pistulka 43:01
So mechanical or electrical services companies doing industrial work. Yes. Heavier. Industrial work heavy industrial. Yeah. Yeah. Heavy Industry. Industrial. Okay. And in the Pennsylvania area,
Ashley Walters 43:21
or we’re right here on the Ohio, New York border. So kind of that tri state region around Lake Erie, good
Damon Pistulka 43:29
when you get that to tri state, Ohio, Pennsylvania, New York. Good. Well, hopefully, someone’s listening, because I think it would be fun to try to integrate with your company. I mean, I’m a little biased towards engineering leaders myself. But I think it’s I think you guys are doing awesome at Onyx there and you’re gonna, you are going to transition this into a new generation of owners.
And I just your, your forethought, by thinking of the fact that going from second to third is so difficult and planning like you did, I think is going to is going to be a really, really great decision. I can’t tell you how many businesses that we talked with that it’s barely gets to the second and then it can die. And the third. In fact, I interviewed a gentleman by the name of Mark Kramer a couple of weeks ago that works with family businesses. They’re in New York, and he can tell you a gazillion stories about it. And so I’m very excited about you and I’m just waiting to hear what acquisition number one is.
Ashley Walters 44:47
Damon Pistulka 44:50
Yeah, it’s what’s next. All right. Well, I’m so happy today actually that we could have you talk about growth by acquisitions, the plans that you guys are have there. Add on expert doing that and learning more about your company, you know, 56 years now in the foraging industry. Making those furnaces is just, it’s just awesome, incredible, you know, just salt of the earth industrial work because I just got to imagine what was some of the stuff that went through these furnaces? over 56 years?
Ashley Walters 45:24
Yeah, that’s incredible. Everything from submarine parts to ship shafts to. Yeah, munitions. And that’s crazy.
Damon Pistulka 45:32
Yeah, good stuff. Yeah. Well, thanks so much, Ashley for being here. Today. We had Ashley Walters here on the faces of business talking about growth of family business through acquisitions. Ashley is with Onyx. Look them up. Check them out on LinkedIn. What’s the website?
Ashley Walters 45:53
It’s Onyx. ink.com 1x inc.com.
Damon Pistulka 45:58
All right. And if somebody does have that first acquisition in mind, how should they contact you?
Ashley Walters 46:05
So there is a little video out there that tells just a little bit more about what Drew’s and my mindset was on this. It’s an under the resources tab and under the make things better page, and you can just take a look at that video and then contact us, you know, through the website, and I’m the one getting those emails, so I’ll be happy to connect.
Damon Pistulka 46:23
Awesome. Awesome. Well, thanks, everyone for being here today. Thanks, bonita and Carter and Margo, I always say cargo Margo, because it’s centered, but I know Margo, thanks for being here today and everyone else that was listening but didn’t comment. We will be back again later this week with another episode of the faces of business. Thank you, everyone. Bye