Safeguard Closes Three Deals in First Two Quarters of 2017
It’s been a busy year for Safeguard’s Business Acquisitions & Mergers (BAM) team. The Dallas-based group recently completed the divestiture of Minneapolis-based Brand Advantage Group. The deal closed in 90 days.
For those in need of a refresher, Brand Advantage Group was created in August 2016 through the merging of QBF – Solutions Beyond Print and Team MHC, two top 50 Minnesota-based distributors that Safeguard Business Systems acquired in July and November 2014, respectively. (The Safeguard BAM team also assisted with these transactions.) Since forming Brand Advantage Group, Safeguard has operated the business through its company-operated division, under the guidance of former QBF executives David Daoust and Tom Lyngdal. Safeguard decided to sell the business to Daoust and Lyngdal, who will now lead the Brand Advantage Group by Safeguard enterprise as an independently operated distributorship within the Safeguard network.
“As [Safeguard’s parent company] Deluxe continues to define its strategy for growth, Safeguard felt that Tom and I would be better suited as a Safeguard franchise rather than part of the company-owned division,” new CEO Daoust told Print+Promo in an email interview. “Our business model was clearly defined and it made sense for us to run independently.”
There are 56 employees total and an office/distribution center in Plymouth, Minn., and Green Bay, Wis. When asked about his current plans for staff, Daoust said that it was important for he and new CFO Lyngdal to keep everyone together, citing their tenured employees’ strong relationships with clients and customers.
“Following the transaction, we were able to keep everyone, which I think can be attributed to our employees clearly understanding that we had their best interests in mind,” Daoust shared. “The whole group was willing to pull in the same direction, giving us the opportunity to fully integrate under Brand Advantage Group.
“The only employees that are no longer with us have been our decision to let go,” Daoust added.
He also was quick to point out that Brand Advantage Group utilizes the Deluxe facility in Arden Hills, Minn., which gives the team access to an additional 60,000 square feet.
Daoust and Lyngdal have worked together within the industry for more than 20 years. Daoust began his print career immediately after college, joining Uarco Inc., a company acquired by then Standard Register in 1998, in the sales division before transitioning to sales management at a Minnesota-based manufacturer. Prior to working for QBF, Lyngdal worked for General Mills in its management-training program.
Because superior customer service is a necessity in today’s competitive landscape, the staff at Brand Advantage Group has focused on providing market-leading expertise in key areas, including sourcing, purchasing, distributing customers’ branded print email, apparel and promotional items, to businesses throughout the Midwestern U.S., according to a press release.
Both executives believe this strategy has positioned them well in the market. “We made a conscious effort about 10 years ago to start moving away from traditional print while honing in on marketing because we knew that was the future of the industry,” said Lyngdal. “We’ve always talked about the idea that print and promotional tactics need to be interlaced with technology as the driving force in today’s world. That forward-thinking mentality has allowed us to stay ahead of the competition and survive through decades of change.”
“[Daoust and Lyndgal] have been ambassadors of the Safeguard brand since they first joined the company as employees following our acquisition of QBF," R. Scott Sutton, vice president of Safeguard and leader of the BAM team, said of the acquisition. “Both had a dream of business ownership … of creating their own destiny and supporting the livelihoods of the talented team members that make up Brand Advantage. The BAM team is humbled and excited to have had a hand in helping their dreams come true.”
In addition to Brand Advantage Group by Safeguard, the BAM team recently completed the acquisition of Dix Hills, New York-based print and promotional company L.A.M. Enterprises Inc. Similar to Brand Advantage Group, L.A.M. was operated as a company-operated business following its acquisition in 2016. In March 2017, the business was sold to Canadian Safeguard distributors Ian Barrie and Mike Gommerman, who will run the L.A.M. business as a Safeguard distributor enterprise.
“This exciting new partnership with Safeguard allows us to further align our businesses in the U.S. and Canada while maintaining our focus on the niche market that has helped us thrive in this space,” said Barrie. “Prior to the acquisition, Mike and I operated—and continue to operate—two separate businesses in Canada. This partnership allows us to come together on specific clients, collaborate and work together to manage the business and the accounts.”
Last August, Print+Promo spoke to Sutton about BAM’s approach to M&As. He expanded on what he calls an “anti-establishment” mindset and how that has benefited Safeguard. “What I mean by that is when you look at the typical finance-oriented, acquisition-type team—whether it’s a private equity group or an investment bank, for example—a lot of times they’re very metric-, numbers- and finance-driven, and that’s OK,” he explained. “That’s an approach that’s worked for a lot of firms and a lot of professionals in the space for a very long time.
“Our orientation is different,” Sutton continued. “We’re extremely focused on discipline and culture, and it’s very anti-establishment. So, for us, we’ve learned over time that when we can find a business that is metric-driven and has a culture that meshes well with the Safeguard culture, those types of factors are the ones that have led to the deals outperforming the thesis that we developed going into the transactions.”
Safeguard is anticipating the close of a third deal later this month. Stay tuned for more details.
Related story: Exploring the Land of Mergers and Acquisitions