How HBM Successfully Integrates Itself into new Portfolio Acquisitions

A Q&A with Alex Aubel, HBM’s Corporate Controller and integration manager for Schafer Industries, who sat down with us to discuss his role at HBM and his responsibilities as the integration lead for Schafer Industries.

CC: Please introduce yourself and your role at HBM.

AA:  I joined HBM in 2016 as the Corporate Controller and am involved in several finance aspects of the company including financial consolidation and reporting, treasury management, insurance and tax compliance. From time to time, I also participate in strategic financial decisions affecting HBM and our portfolio companies.  What I enjoy most is leading the financial due diligence efforts on potential acquisitions.  I get to roll up my sleeves and dive into the numbers to understand a company’s story.  It is exhilarating.

My experience in public accounting and my financial analytical background has given me a solid foundation to perform important analysis regarding the businesses we consider acquiring.  It also allows me to add value to our companies in other capacities including integration.  I am fortunate to have found an opportunity at HBM that allows me to utilize my skillset to complete my day-to-day responsibilities as well as take on projects that stretch my learning capacity – making, what can be at times, monotonous accounting processes exciting.

CC: What role did you play in the Schafer Industries acquisition before it became part of HBM’s portfolio company family?

AA: Prior to the close date, I worked closely with the Vice President of Corporate Development, Daniel Wright, and the corporate development team to identify the relevant opportunities and risks of the business.  The associates and I worked closely together to ensure the market research we were conducting was in line with the “story” the financial statements presented.  It was a tremendous learning experience.

There is always room for improvement, but I was extremely proud of the work we did on Schafer. The associates and I were able to pinpoint several customer and product specific movements occurring within the company, allowing us to frame our investment thesis and shape our opinion of the business. Our diligence set us up perfectly to execute on our integration plan starting day one of ownership.

CC: Please explain the integration leader role and why you were chosen, touching on both the short and long-term goals.

AA: HBM appoints an integration lead for each new acquisition. It is an integral role as the position helps develop and implement a plan to ensure the company is seamlessly transitioned into the HBM family.  The integration process itself involves our enterprise-wide resources – technology, talent management and finance – allowing us to implement the executive plan efficiently.  I feel our approach is a unique and a true differentiator from traditional financial buyers.

I was excited to be selected as the integration lead for Schafer as I am truly passionate about the business and its long-term opportunities.  Like most finance people, I tend to be a pessimist when it comes to evaluating transactions.  As I became more entrenched in the details of the transaction and understood the market dynamics and Schafer’s competitive advantages, I realized its potential and how Schafer would be a perfect fit for HBM.

The long-term goals of integration are strategic in nature.  Many of the items we identified during due diligence will be used to assist in the strategic planning process – setting key milestones for the first 30, 60 and 90 days.  It is a team effort as we implement the plan at each of Schafer’s locations.  As we approach the 90-day mark, the integration efforts will become less administrative in nature and more strategic about how to execute on the long-term strategies.

The most influential learning experience of my short career occurred during the first 30 days of integration. Eric Van Rens, a longtime Mississippi Lime Company executive, was appointed Schafer’s new CEO.  My task was to essentially shadow Eric during his transition – scheduling and attending meetings with key resources within Schafer to quickly acclimate him to the business.  Shadowing one of our CEOs through the first 30-days of his appointment has been a tremendous experience.  It provided exposure to how a new CEO gets up to speed quickly on a new business and how he can make informed decisions early on in his tenure.  I appreciate Eric allowing me to work with him during this time as it truly broadened my business acumen.

CC: How is your role as integration lead structured and whom do you interact with regularly both at Schafer and HBM?

AA: Integration is an all hands-on-the-deck effort, allowing us to draw from a broad set of resources and experiences across the organization. I interact with every department within HBM and Schafer, providing me with first-hand exposure to the type of questions senior leadership asks to understand how a business operates to construct informed strategies.

The opportunity HBM presented me with the integration lead role clearly demonstrates their commitment to talent development.  Every step of the way I received clear guidance and mentorship from both senior leaders and the associates team.  It has been a tremendous experience that I know is unique for a person early on in their career.

CC: Do you foresee any challenges with the integration.  If so, how do you plan to address them?

AA: No matter how much diligence is performed, there will always be challenges that arise during the integration phase. Overall, the integration process for Schafer has been relatively smooth, and we are now at the point where HBM can begin decreasing its involvement from an integration oversight standpoint. I look forward to remaining intimately involved with the business over the next year, continuing what we have started during integration and serving Schafer wherever needed.

CC: How will you measure your success?

AA:  I believe success is measured by the overall performance of the business and cannot be demonstrated overnight.  The best way to think about it is to look at the functional teams we defined during integration.  If these teams and departments are enhanced after the acquisition, then I would say the integration was a success.  The same goes for the culture.  If Schafer is a better place for employees and customers, we were successful.

CC: Is there anything else you would like to add?

AA: I would like to highlight our Accelerated Development Program. Our associates have been an unbelievable resource during the integration process.  There are many moving parts during the first 90 days post-acquisition, and having meaningful, insightful resources to assist in commercial and operational projects is invaluable. Several associates have made Schafer their home for the past couple of months – a gesture that people at Schafer and HBM truly appreciate.