Safely Ahead of the Game
Longo says Northern Safety went after Safeco for its first acquisition following his buyout because of its similar product line and customer base. What's more, Safeco also has a direct sales force and offices throughout the southeastern United States. Northern Safety gained an additional marketing channel through the outside sales force, and Safeco is able to leverage Northern Safety's catalogs as an additional sales vehicle.
Sexton suggests that the complementary sales channels are the most important component to the acquisition. The most common objection to ordering via catalog is that customers deal with their local vendors, Sexton says. Safeco's outside sales force gives Northern Safety a leg up on its catalog competitors by enabling the company to be both a catalog vendor and a local vendor.
And while Longo and Sexton see Safeco's sales force as a strong complement to Northern Safety's own efforts, Victor Hunter, president of Hunter Business Group, a Milwaukee-based B-to-B consultancy, points out that "the similar customer set and product synergies really will drive any success they have."
As the acquisition cleared the way for Northern Safety to acquire the new fulfillment center, the facility enabled the cataloger to ship more quickly. "Essentially, we can now ship to two-thirds of the country in two days or less," Longo says.
Hunter notes that this is particularly important for a business like Northern Safety. Pointing to his firm's own research, Hunter says, "Fast, efficient delivery is far more important for consumables under $200 than for durables more than $500."
And since Northern Safety's average order size is $250 and the company's most popular products are such items as disposable gloves, hearing protection and eye wear, most of the company's customers should appreciate the speedy delivery afforded by the new distribution center.
With the acquisition, Longo and his team face several challenges. Safeco has been rebranded as Northern Safeco and while nearly all of the Kingsport employees remain in place, Longo implemented the same sort of managerial restructuring he used in Frankfort nearly a year prior. Safeco needed the restructuring, he said, because the company wasn't operating with the efficiency and productivity that Northern Safety does.