TAMPA, FL-It's official, Audio Visual Innovations (AVI) and Signal Perfection, Ltd. (SPL) have merged to form AVI-SPL, establishing the largest provider of global audio/video systems and integration services. Now at the lead of an industry with a few too many recent memories of consolidation efforts gone bust, executive chairman Marty Schaffel and vice chairman Chad Gillenwater are the first to point out that they've got a business plan they think will work out for all involved.
The process of merging the two largest integration firms in the U.S. started two and a half years ago, and, as Schaffel pointed out, "there have been so many twists and turns, particularly when you throw in the economic environment we're in and how that has caused a significant set of obstacles to most efforts of this nature." Alluding to the many observers who compared the drawn-out events to "the fiascos of Caribiner, Intellisys, or MCSi," Schaffel said, "Chad and I have believed from the beginning that this will be different. We are very committed to bringing our companies together and making them one unified effective enterprise with a unified culture and a strategy for success. The difference between this and the previous entities that I mentioned is that we're very focused on our people and on our customers, and this isn't about arrogance, greed, stock prices, or any of the things that corrupted the other endeavors."
The merger attempt received equity financing from Silver Lake Sumeru, the middle-market group of Silver Lake, a leading investment firm focused on technology-driven growth industries. Financial terms of the merger and the Silver Lake investment were not disclosed, but Silver Lake's shining reputation within the tech industry is a real seal of approval on the deal, in Schaffel's eyes. "It's enormously exciting to have Silver Lake behind this," he said. "Having them involved with us makes it extremely certain that we will have great penetration in a broad range of technologies spanning further outside of our core competencies of audiovisual, systems integration, videoconferencing, and so forth."
Seeing as how so many private equity firms are interested only in the bottom line, the next question many observers will ask is how Silver Lake's involvement will affect AVI-SPL's business. Again, the question was met by optimism. "They have already in a very short time brought fantastic ideas and concepts and guidance to our thinking to help us collaboratively strategize where we can go from here," Schaffel said.
A glance at the day-to-day operations of the newly merged company reveals a comprehensive national and international footprint. AVI-SPL now exceeds 1,200 employees in more than 40 offices across the United States, Mexico, and Dubai. Gillenwater elaborated, "We will be able to provide the Fortune 1000 businesses as well as multi-national businesses a single company that they can come to for a broad set of deliverables, products, services, capabilities, and the widest range of geographical locations yet to have been established in this industry. We're hoping that combination will enable us to be heard in the greater market, and we believe that that's going to be good for the whole industry."
The market is certainly a different place than it was when talks were initiated between the two companies, but in an industry where business can be booming in one part of the country while another region languishes, AVI-SPL's broad array of services and geographical coverage will come in handy. With concerns about the state of the U.S. economy making headlines each day, Gillenwater pointed out, "A portfolio diversification is always key to any type of changed economy, and we certainly will have that both in the type of services we sell, where we sell them, and who we sell them to. We touch all levels of the marketplace."
Furthermore, those offerings can be seen as a boon to clients facing tighter budgets. "We're bringing a technology that encourages productivity and profitability, and allows companies to be more efficient and 'green'. We're bringing something to the market that can help companies in leaner times."
The strategy for merging the companies is founded on the usual "best practices" doctrine, with AVI's training, organizational capabilities, and infrastructure melding with SPL's engineering talent and its relationships with the global 1000. The merger will have a "really minimal impact on offices and employees," Schaffel said. The companies' offices are fairly widespread, with little overlap. And in terms of personnel, Schaffel says the inevitable staff reductions that come with most mergers won't be a part of AVI-SPL's future.
"We have a great need for our employees to come together and to take all of the work being generated by the two companies and process and handle it," he said. "We will be looking for efficiencies in working together and understanding what different strengths and capabilities that have previously been each other's independent edge, and are now a combined edge."
The management team working with Schaffel and Gillenwater consists of John Zettel, CEO; Stephanie Scanlon, president and chief sales and marketing officer; Don LaNeve, COO; Nicholas Yancich, CFO; and Steve Benjamin, EVP.
"The management team has diverse experience and will bring a level of leadership that really has the vision to take this company where no company has gone in this business before," Gillenwater concluded. "What we're bringing together is not just two companies, but two reputations, and only two. We're not diluted by a bunch of entities coming together, and we're not coming together in a way that we have to break anything down. We are combining very positive capabilities. There's a lot of excitement to being involved in a company this size with this amount of opportunity at the lead of the industry."