case studies

System Integrators Sale to Raven Industries

System Integrators, Raven Industries (RAVN)System Integrators was a leading small to mid-volume provider of electronics manufacturing services to original equipment manufacturers located in the central United States. The Company had successfully positioned itself as a reliable and high-quality designer and assembler of electronic products to several large and growing end-use markets, including industrial controls, medical instruments, security devices and transportation. Rapid growth in the Company’s electronics assembly business resulted in a growing dependence on a small number of large and sophisticated customers. The vulnerability created by this strategy quickly became apparent to SI’s three owner-managers when one of the Company’s key accounts moved its assembly work to another supplier with facilities located closer to the customer’s own operations.

After stabilizing the business, the Company’s shareholders began to evaluate various strategies for maintaining and potentially growing the value of their business in an increasingly competitive environment. In order to take the business to the next level, the owners realized they would have to invest a significant amount of additional capital, risking their personal wealth and lifestyles. These were risks they were not prepared to assume. The Fortune Group was retained by SI to act as financial advisor in the sale of the Company.

As the manufacturing sector began to slow creating an additional impetus to pursue a transaction, The Fortune Group devised a strategy whereby key customers and suppliers were informed of SI’s pursuit of a strategic partner, thus, allowing SI to continue to preserve and even grow these relationships without compromising shareholder value. Ultimately, we negotiated a sale transaction with Raven Industries (Nasdaq:RAVN), a diversified industrial manufacturing concern. SI’s management team, and design engineering capabilities greatly enhanced Raven’s Electronic Systems Division’s product and service offerings for its customers and SI’s customer base allowed Raven to expand its served markets and geographic presence in the Midwest.