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Inside The AVI-SPL Merger - AvNetwork.com

Inside The AVI-SPL Merger

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Chad Gillenwater, president and CEO, SPLTAMPA, FL, and COLUMBIA, MD-As the merger of two of North America's largest systems integrators nears completion, AVI's Marty Schaffel and SPL's Chad Gillenwater are telling a story that everyone in our industry needs to hear. Combining their two companies' operations will do far more than simply create a business with a staff of more than 1,200 and projected annual revenues of $400 million. It will bring a whole new profile to the AV business, imprint it more firmly in the minds of customers, and enable it to continue on its growth path, despite the gloomy forecasts of the macro-economists.

Gillenwater says that a major driver for the merger is the customer requirement for a level of service that SPL or AVI might not be able to deliver as effectively if they remained on their own. He tells SCN, "What we're seeing today is that clients are asking for a higher level of capability, especially where we touch IT. We're moving towards this additional service which is AV-IP, which requires a lot more engineers and more sophisticated training programs. Together, we will be that larger company that gives credibility to the systems that we serve our clients with."

Creating a huge, nationwide AV integration business has been tried before, with results that might politely be described as mixed. Schaffel says that negotiations between SPL and AVI have been protracted partly because both parties have been so keen to avoid the mistakes of earlier endeavors. "We had a year of very slow and deliberate discussions because neither of us wanted another MCSi," he explained. "We were extremely conservative and cautious. Our employees, customers and vendors may not have been able to see it, but the time has given management an opportunity to meet and discuss how we adopt the best practices of both companies.

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Marty Schaffel, owner and managing chairman, AVI
"We've been moving along, addressing many issues of concern that have hampered previous efforts to do this-like getting the appropriate accounting system, procurement, IT, and human resource procedures in place. There's so much ground that we've covered."

"MCSi sold computers," Gillenwater emphasized. "They entered the market without strong financial backing and they basically just wanted to sell more equipment. We have a much better understanding of what it takes to make clients happy."

Both men stress that they see their companies as complementary to one another. "It's not like a big bank merger where there are all these lay-offs," Schaffel said. "There is so much opportunity out there for both companies, and we can only exploit that opportunity if we have the right level of human resource."

Underlining the nature of that opportunity, Gillenwater says: "We're going to expand internationally through acquisition and placement, in locations where we want to strengthen or expand into, and also look at broadening our offering into things like telephony, security, and structured cabling.

"It's about anything that can be an end point. If you look at AV-IP, we want to be experts in both because that's what companies want. Our customers have to go outside for these systems and services because they don't have an in-house resource. And if they have seven different companies to call, then that's no good. If they have one neck to choke, they're happy."

And at a time when the AV market is seeking reassurance, the AVI-SPL merger offers the prospect of providing a safeguard against stagnation by raising the industry's profile to a new level.

"Ask 50 purchasing people in a recession: 'Would you buy AV?' They'd say no," Gillenwater reflected. "Ask them if they would invest in technology that would help them cut down on travel, increase their efficiency and boost their productivity, they'd say yes. That's the kind of opportunity we're talking about here."

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