A surprising M&A announcement at the end of the year: Leadec has acquired US company Diversified Automation. In a joint interview, founder and CEO Tony Young and Leadec CEO Markus Glaser-Gallion report on the reasons behind the move, opportunities and future prospects.
Q: Mr Young, Diversified Automation became part of the Leadec Group on December 31, 2020. What prompted you to this decision?
Tony Young: In many respects, 2020 was an extraordinary year. Everything was and still is in a state of flux and difficult to predict. On the one hand, online purchasing has skyrocketed and therefore the demand for automation solutions is booming. On the other hand, there are previously strong industries which are seriously struggling. When I founded Diversified Automation (DA) in 2002, my specific aim was to simplify the integration of automation systems, to deploy the strongest technologies and to provide the best project management in the industry. At the same time, I want to ensure growth, stability and reliability for the company, its customers and the employees who drive DA forward every day.
Q: What does that mean specifically?
TY: Last year, we set the course for large-scale development of DA so that we could realize our full potential in 2021 and beyond. We expanded our workforce and placed our automation solutions in other sectors outside of parcel shipping. This included the automotive industry, which is how we came into contact with Leadec. A company that suits us perfectly with its ambitions to expand its engineering business in the USA. My team built Diversified Automation from the ground up, so naturally, I want to be sure that it is in the best hands. Not only in terms of expertise but also with respect to knowledge of the market outside the United States. Through the sale, we have gained access to the European market practically overnight. And, as far as the corporate culture, we found a company that aligns in our vision and values. For example, “Take it personal” is one of our core values at DA, and I see this at Leadec too. A perfect match in many respects.
Q: Mr Glaser-Gallion, what does your company hope to gain from the acquisition?
Markus Glaser-Gallion: As Tony says, we complement each other perfectly, in terms of both the culture and the business. With DA, we are implementing our strategy to diversify Leadec into a high-growth, non-automotive end market: the thriving express parcel market and the highly attractive warehouse automation market. Our target group is factories and the corresponding infrastructure. And we want to offer our customers everything they need in relation to their factory – from planning, engineering, automation, installation and commissioning through to on-site service, decommissioning or the relocation of entire systems. Specifically, we see three opportunities arising from this acquisition: First, DA will increase business in the automotive sector, second, they will expand their activities with customers from the parcel and freight industry in Europe too and third, Leadec will increase their on-site business in North America.
Q: After almost 20 years, suddenly no longer being independent and becoming part of a global group under German management – isn’t that also a risk?
TY: It’s an opportunity. DA is a healthy and growing company. We made the decision with an eye to the future and from a position that was more than comfortable. We are therefore on equal footing. This is also reflected in the fact that we continue to represent our brand with confidence – as part of the Leadec Group. Our team has now become even bigger and stronger – and ultimately less dependent on me as an individual. Markus said that we also fit together “culturally” and that’s exactly how it is. Leadec’s business is a “people business” and the services they provide are their products. The people who work at Leadec do so with expertise and passion. Just like at DA.
MGG: Absolutely. And with respect to the distance between our headquarters in Germany and those of DA in Louisville, our North American headquarters are in Cincinnati, Ohio, so they are practically just around the corner. We operate at over 300 locations on four continents, often on site in the plants of our customers. We believe in the strengths and competence of local companies. We consider Leadec to be a global player and a local partner. For this reason, with their over 140 employees, DA will also retain their local authority based on long-standing customer relationships and trust. And in the end, that is what it all comes down to: customer focus, professionalism, openness and collaboration.