by Sam Weisberg
Surgere, a provider of supply chain management software and hardware, expects to make three acquisitions in the near term, said CEO Bill Wappler.
The Green, Ohio-based, family-owned business, with annual revenue of slightly more than USD 50m, will likely close one deal this year and have signed agreements with the other two targets by the end of 2022, he added. Two of the targets in question are in North America while the third, an engineering firm that supports the automotive and aerospace industries, is in Germany, he said.
He added that one of the targets is a small food-related technology group, while the other is involved with motorsports. Surgere began servicing the latter industry over the past year, when it became a sponsor of Parker Thompson, a driver on the JDX Racing team in the IMSA Porsche Carrera Cup North America series.
“In three years, we’ll be about three times [bigger] than what we are,” Wappler predicted, adding that Surgere is averaging 143% year-over-year growth. Acquisitions are necessary for the company to “remain as competitive as we are,” he said.
The automotive industry, which includes motorsports, makes up around 82% of Surgere’s business, Wappler said. Surgere uses sensor-based Internet of Things (IoT) technology to ensure that racecars and other vehicles receive the right components as well as accurate data on container management, packaging and transport visibility. Mazda, for instance, recently became a client of Surgere; a press release said that Surgere’s system will help Mazda avoid such hurdles as “misdirected packaging, packaging loss, expedited freight costs, and high volumes of cardboard use.”
For racecars, Surgere can report accurate data back to the manufacturers on how much wear and tear individual components are undergoing per race, and how composites are operating under high-stress environments, Wappler explained.
The company wants to accelerate its footprint in the motorsports space “through acquisitions of data specialists that are already” servicing that sector, said Wappler.
“We’re investing a lot of time and dollars into that sport,” added Michael Wappler, Bill’s son, who heads up Surgere’s motorsports division. Surgere wants to grow its aerospace presence because “we’re good at identifying the life cycle of parts, which is incredibly important to aerospace,” said Bill Wappler. He added that he predicts raw food shipment will “undergo much of the scrutiny we see in pharma now,” hence Surgere’s interest in the food and food equipment sector. On its web site, it states that, through Surgere’s system, farmers will be able to see in “near real time where their products are in the harvest, transport, and processing chain.”
Surgere’s other industry focuses are retail, biomedical and manufacturing, according to its web site. Founded in 2004, it operates in 26 states and 31 countries.
Asked if Surgere works with a nancial advisor to look for targets, Wappler replied that the company has close ties with Brown Gibbons Lang as well as DC Advisory. Its law rm is Tzangas Plakas Mannos.
When asked, the CEO said the company gets a fair number of M&A approaches from larger groups, but is not interesting in selling right now.
“We’re veteran-owned, and we have a number of veterans at the company,” he added. “There’d be a lot of people that would be affected, perhaps negatively, were we to change our veteran-owned status.”
“We’re good where we are right now,” he continued. “We have our name on the side of a Porsche!”