How a Year of Commuting by the CEO Spurred New Opportunities for HB Global
Buying an existing business in a market where you see growth potential often involves more upfront cost, but it presents less risk than starting a company from scratch.
If you don’t take the time early on to understand the company you are buying – what makes it work, the people that have established the processes and local connections to grow it – you may overlook opportunities to leverage key people for greater long-term success of the brand.
At HB Global, LLC, we understand that every mechanical service business we acquire is unique. Even though it’s an industry we’re very familiar with, there is a learning curve with every acquisition and we know trust of new employees needs to be earned. That’s why we invest the time before, during and after the acquisition to ensure a successful transition.
Read on to learn about our 2014 acquisition of IT Landes in Montgomery County and how this acquisition helped set us on a course to where we are today, a company of more than 1,200 employees and $218 million in revenue.
A Key Acquisition in Our Growth Story
Since 2011, we have successfully made 19 acquisitions. Each acquisition has helped us expand our geography, diversify our breadth of service offerings and increase the value of our Employee Stock Ownership Plan, or ESOP.
One of the key acquisitions that ultimately led to the formation of HB Global in 2017 was HB McClure’s purchase of IT Landes, one of the company’s four operating divisions. The 2014 acquisition added more than 100 employees to HB McClure, a Harrisburg-based heating, ventilation and air-conditioning company, and opened up new markets in the Philadelphia region.
It was the company’s largest acquisition at the time, pushing company revenue from less than $40 million in 2013 to about $65 million.
“It set HB on a course to where we have gone,” said Kerrin Musselman, Division President at IT Landes.
Musselman has worked for IT Landes for 32 years and has seen the brand grow to about 300 employees over the last five years.
He credits that first year of HB McClure’s ownership for the company’s long-term success. Specifically, he points to President and CEO Bob Whalen taking the time to be on site to understand the operations and the people within the organization.
“Bob worked in our office every day for a whole year, which impressed everyone here,” Musselman said. “He drove from Camp Hill and was here every day at 7 a.m. That really set the tone and he gained a lot of respect by that.”
Understanding and Promoting From Within
The roughly two-hour commute each way helped Whalen and HB McClure identify key individuals like Musselman for larger roles within the organization.
The hands-on approach to run IT Landes and investments made in new tools, equipment and especially employees have helped the division pursue larger HVAC construction projects and expand the company’s territory into the Lehigh Valley.
“We’re starting to creep into bigger jobs and definitely never could have done this on our own,” Musselman said.
The ESOP structure under HB Global has also fueled talent recruitment and retention at IT Landes, which has seen revenue more than double since the acquisition.
That growth has provided HB Global with additional capital to pursue other acquisitons outside of Central Pennsylvania and the commonwealth in the last five years.
Along the way, IT Landes also has made two acquisitions – R+R Mechanical Associates and Indian Valley Mechanical LLC – to bolster its commercial HVAC businesses and widen its footprint.
“One of our goals is to grow our commercial services,” Musselman said. “These bolt-on deals have been very positive for us.”
Join HB Global’s Growing Team
Are you thinking about selling your business and looking for a growth opportunity for your workforce?
HB Global is actively seeking new HVAC partners. We will help you structure the right deal to meet your retirement goals. Contact us today to learn more about growth strategy and how your company goals might align with ours.