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Distributor's Link Magazine Fall 2021 / Vol 44 No 4

72 THE DISTRIBUTOR’S

72 THE DISTRIBUTOR’S LINK Len LaPorta Len LaPorta is a Managing Director of The DAK Group, an investment bank specializing in middle-market, privately held companies. Len advises business owners on sell-side and buy-side transactions, capital advisory and valuations. He has completed several cross-border M&A transactions, most notably between North America and Europe. Please visit www.dakgroup.com or email Len at llaporta@dakgroup.com. FASTENER BUSINESS OWNERS CONSIDER THE OPTIONS TO EXIT OR EXPAND The fastener industry is changing and standing still is not an option. Business owners must choose between several financial paths, including investment in growth, M&A activity and cashing in. During the last 18-months, business owners in the fasteners industry have been confronted with global variables not seen since WWII. For many, the impact of tariffs on the industry continues to pour salt on the battle wound, as well as the on-going choke-point disruption in supply chain brought on by the pandemic. Another issue is COGs (cost of goods sold) high metal prices coupled with ally inflation. Also consider: what impact does the fastener industry’s anticipated slow growth rate of 0.8% have on your business planning? In these low growth scenarios, a business owner is faced with a decision – do I acquire a competitor to gain market share or do I use capital to fund a new product development effort that could take years and not be accepted by the end-markets. As most industry observers know, the Big 3 end-markets of automobile, aerospace and MRO/ construction make up nearly 75% of the North American addressable fastener market. How do you diversify your business mix when two of the three sectors have been severely challenged from Q1 2020? Yes, we are seeing positive traction with commercial aerospace and automobile production, but we probably need solid quarterly performance through Q3 2022 to declare ‘all is well’. Consolidation in the fastener segment will most CONTRIBUTOR ARTICLE likely accelerate as growth through acquisition becomes the model. Yet another consideration is whether the current administration will solve the tariff environment/level the playing field or, on the domestic home front, table the discussion on increasing capital gains taxes on business owners in the foreseeable future? This is the perfect time for business owners to make a decision about their future and the future of their company. The fastener marketplace has become more complex and is facing significant changes that will create both challenges and opportunities. Do you have the mental and physical strength to weather another four quarters of choppiness and stress of ownership? Does your next generation of family have the engineering/ mechanical backgrounds to lead the family business to a higher plateau? Brands and manufacturers will continue to seek vendors who can handle their growing supply chain requirements, as well as make investments in new equipment and more integrated information technology and other capabilities. You may need to ask yourself if these are capabilities you have internally, and if not, how and where you will acquire these skills, experience and competencies. Many executives and stakeholders are wondering what strategic direction is best for them. They can choose to continue to grow organically, or through acquisitions, finding partners or additional funding. CONTINUED ON PAGE 148

THE DISTRIBUTOR’S LINK 73 The Auto Bolt Company is excited to welcome Todd McRoberts as the Company’s Vice President of Sales. Todd will be responsible for managing our internal and external sales force as well as continuing to grow and expand our business. Well known in the fastener industry, Todd brings over 30 years of experience to Auto Bolt. As a fastener veteran, Todd knows his way around many industries including; automotive, military, truck, and distribution. He has experience working with Tier 1 & Tier 2 Automotive and Truck customers. Throughout his career, he has had great success building and managing many domestic and international sales teams. True to his roots as an Ohio native, Todd received his BSBA from Bowling Green State University in Marketing and Sales Management. He loves to cheer on the Scarlet and Gray with his wife and two children. Auto Bolt, located in Cleveland, Ohio, is an independently owned manufacturer of quality fasteners since 1948. For more information contact The Auto Bolt Company by telephone at 1-800-988- BOLT or visit them online at www.autobolt.net.

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