June 28, 2016 Updated 6/28/2016
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Michael A. Marcotte From left, Douglas Donahue, Morgan Endecott, Lisa Fiorenza and Matt Murrill.
Chicago — Solid ways of measuring data are needed in the world of plastics mergers and acquisitions.
A panel of financial pros tackled this topic at the Plastics Financial Summit on June 16 in Chicago.
“You really need to have quality data to do good valuations and to get different departments to work together,” said Matt Murrill, chief financial officer at thermoformer Profile Plastics Inc. of Lake Bluff, Ill. “That can be challenging after an acquisition.”
The need for good data measurement is clear at injection molder Quantum Plastics LLC of Elgin, Ill. The firm has made seven acquisitions in recent years — including two in two weeks in March.
This rapid pace can create its own challenges, according to CFO Lisa Fiorenza. “Some of the companies we’ve acquired have never really budgeted before, and some didn’t understand EBITDA [earnings before interest, taxes, depreciation and amortization] — but now it’s ingrained in their brains,” she said.
Fiorenza added that when going into a newly acquired firm, the buyer “shouldn’t just make changes, but look at best practices — don’t make sweeping changes from day one.”
Entrada Group of San Antonio faces some unique metrics challenges in helping clients learn how to manufacture in Mexico. In some cases, the firm provides clients with manufacturing space at its two Mexican locations.
“We’ve helped our clients with logistics and with allocating the right percentages in retaining and training employees,” said Doug Donahue, Entrada’s principal and vice president of business development. “Mexico can have higher overhead costs and severance costs.”
Operational metrics can prevent infighting among employees, added Morgan Endecott, CFO at injection molder Innovative Injection Technologies Inc. (i2Tech) in West Des Moines, Iowa. But they have to be used wisely.
“We try to show employees metrics on things they can control, like accidents, quality and delivery,” she explained.
