Stand Up Business Carve Out in 6 Months
On January 31, 2020, a private equity (PE) group acquired a carved-out business unit in the energy services industry and set goals of at least tripling the company’s size by year 5. The PE group faced an aggressive deadline to stand up the newly formed company, Industrial Specialty Services (ISS), from scratch while generating $40 million in annual revenue and supporting more than 200 employees. Operating out of Deer Park, Texas, and now with six locations, ISS was created to provide technical maintenance and repair services and solutions to the refining, petrochemical, gas, power, pulp & paper, offshore and subsea markets throughout North America.
The CEO, James Craig, needed to form his management team, hire personnel and establish new company departments for Operations, Sales, Marketing, HR, Engineering, Safety, Accounting and IT. Additionally, Craig needed to establish data and voice networks and related infrastructure and enterprise systems for office locations in the USA and Canada.
Craig knew carving out an asset entangled with its parent company posed a different level of complexity than merely acquiring a company outright. (A carve-out is the divestiture of a business unit that the parent company sells, partially or wholly). As he moved through the due diligence process, he already had a team and technology platform in mind to help him with the process. Craig had previously worked with BDO Digital during an IT Due Diligence engagement conducted for the Equity Group’s purchase of ISS and he decided to ask BDO Digital for their recommendations for this transition.
Deploy Proven Team & Technology
Craig turned to Francisco Callegari, who had helped him set up similar infrastructure at Guardian SealTech, and who now headed IT managed services at BDO Digital. Having led ERP implementations at various companies over the years, the pair knew exactly which platform they wanted: Acumatica Cloud ERP. They also knew who to pull in to deploy Acumatica: NexTec Group, which had successfully implemented Acumatica at Guardian SealTech and many other companies.
“The primary idea was to create a solution that was designed around the cloud,” Craig says. “It was a critical element because we wanted to get away from maintaining servers or being responsible for them. We wanted to limit as much network infrastructure as possible, so we can stay focused on what we do best, which is servicing businesses in their plants and not running an overdone IT show. We needed a solution we could trust, and that we knew would work with the services we provide,” he says.