Q&A: DemandBridge’s David Rich and Kramer-Smilko Inc.’s John Smilko Talk Recent Acquisition
Last week, Print+Promo broke the news that DemandBridge had acquired Kramer-Smilko Inc., a software company based in Bel Air, Md. The purchase of Kramer-Smilko comes on the heels of DemandBridge’s acquisition this past October of Reno, Nevada-based e-Quantum Inc., further enhancing the company’s position as a leader in the distributor management software game. I was able to speak with David Rich, chairman and CEO of DemandBridge, and John Smilko, owner of Kramer-Smilko Inc. Here is part of our conversation:
What is your motivation behind these acquisitions (e.g., is it more than a tactical move to expand your industry footprint?), and why do you think companies like Kramer-Smilko, e-Quantum, etc. are a good fit for your business?
David Rich: We see it as an opportunity to expand our install base so our clients have the ability to take advantage of additional value-add platforms. Good examples of this are the sourcing and e-commerce platforms, and taking advantage of the economies of scale in Microsoft Azure, which offers more capability to the industry as a whole.
Why did you decide to sell to DemandBridge? What qualities were you looking for in a buyer?
John Smilko: There were several considerations that entered into our decision to go with DemandBridge. Specifically, regarding buyer qualities:
- Sufficient resources and the necessary breadth of skill sets needed to transform the industry's IT capabilities for our customers.
- A common vision for the combined entity. David and his team have spent lots of time with me discussing direction and strategy. We have a near-identical viewpoint on our corporate direction and goals.
- Personal chemistry. I knew from our first meeting this was going to be a great fit for the Kramer-Smilko team. Corporate culture is often given a low priority or dismissed in M&A transactions. I think it's really important.
The press release mentions DemandBridge’s 2018 plans to integrate additional technologies currently in the pipeline. Can you elaborate on that? Also, what type of timeline are we looking at, roughly?
DR: We plan to have all of e-Quantum’s products on Microsoft Azure by the end of first quarter. It’s too soon to determine if [something] similar can be done with Kramer-Smilko products. We plan to integrate DemandBridge Enterprise (our e-commerce platform) and DemandBridge Alliance (our sourcing platform) with e-Quantum by mid-year.
How has the merger with e-Quantum been—any problems? If so, how will that affect bringing Kramer-Smilko business on-board?
DR: The Reno office has been a joy to work with. They truly care about their clients and they are genuinely excited to be a part of the DemandBridge family. Anyone who knows John Smilko knows he is the consummate professional. We look forward to having him on our leadership team.
Now that the news of the transaction is announced, what is the No. 1 priority here? What happens next?
JS: [It will be] business as usual—taking care of our customers' needs. [And we are] figuring out if our customers can get some near-term benefit from products and services available through the DemandBridge/e-Quantum offerings.
I'm not sure of the costs between the different platforms, but with Kramer-Smilko and e-Quantum under the DemandBridge umbrella, how will that affect smaller distributors? Is the new company out of their price range? If so, are you worried about competitors sweeping in with a more attractive offer?
DR: Quite the contrary, we see an opportunity to help them grow their businesses. This isn’t about too big or too small, we’re here to help everyone succeed.
Is there anything you'd like to add?
DR: Now I think it gets interesting. We look forward to expanding our offerings to serve more clients’ needs, sourcing and procurement being one example. It will be an exciting 2018!