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Gerald Henseler An Acquiring Mind

September 2001

"It's a manufacturing process, but the intricacies involved in producing a product are fascinating," he says. "In those days, you could watch the hot and cold metal typesetting being done and then follow the job through the production process—something I still find fascinating."

Given his financial background, Henseler also admires the industry from an economic standpoint. "Printing makes a significant contribution to the Gross Domestic Product (GDP) and creates value for corporate America. It also provides high levels of employment and is a well paying, stable industry," he says.

Henseler was very involved in Banta's M&A activity from the beginning and quickly became the point person for the program. The company made its first acquisition in 1969—a flexible packaging operation that Banta owned for 20 years before selling it to concentrate on its core printing business units.

One of those units is its Publications Group, which really got a jump-start early in 1970 when Banta acquired Hart Press in Long Prairie, MN. "That was the second deal I was involved in, and today it is the flagship of our publication division," the CFO says.

The spring of 1974 was a turning point for both Banta and Henseler's career, as then owner George Banta Jr. directed the official formation of Banta Corp. as an entity separate from the original production group (now known as the Banta Book Group). The goal was to keep the organization headquartered in the Fox River Valley and to preserve the name, while positioning it to grow and prosper by going public, Henseler reveals. As treasurer, he ended up being part of the small corporate staff of about five people.

Acquisitions were to play a big part in Banta's growth and the Hall of Fame inductee's career.

"We were really one of the early industry consolidators, even though we don't think of ourselves in those terms," Henseler notes. "At least a third of our growth over the years has come from acquisitions. We've done somewhere in the range of 20 acquisitions, or maybe it's 25 now. I can't keep the total straight any more.

"Since we are an operating company, our acquisitions have been very deliberate and intended to fill a market need or make a line extension, as opposed just building volume. Consolidators tend to be more focused on rapid growth."

Henseler has taken the lead in identifying potential candidates and negotiating deals, as well as managing the integration process from the financial management side of the business. He says his goal has been to preserve the culture of acquired corporations while managing them on a fiscally conservative basis and helping to grow the business.

"In the early days, the process was low-key and non-threatening. I would jut pick up the phone, call the owners and presidents of companies and ask if they had ever thought about possibly selling or merging with another company. Most of the time people were more than happy to talk with me," Henseler reveals. "As a rule, we've retained the management at the companies we've bought. We've just extended our family relationship to a bigger family."

A Crowning Achievement
For a number of reasons, Henseler considers Banta's acquisition of The Beddor Cos. in 1988 as his biggest, but most challenging, accomplishment. The magnitude of the deal alone was enough to turn up the heat, he says. "Since it contributed $160 million in sales spread across five separate organizations, that acquisition increased our size about 60 percent."

Integrating the operations turned out to be the real challenge, however, since the two organizations had very different cultures. "Our culture was very manufacturing oriented, with an emphasis on profits and process efficiency," he explains. "Whereas Frank (Beddor) had much more of an entrepreneurial flare. He had started a number of companies and needed to get those presses filled as quick as possible. His organizations were much more revenue driven and less concerned about the short-term impact to the bottom line."

Management recognized that both cultures had something to offer, so Henseler was faced with melding the almost polar-opposite management styles. "The challenge was to figure out how to bring our discipline to their manufacturing operations, while incorporating their entrepreneurial sales environment into our businesses. It took between two to four years to really get both parties comfortable with each other's style," he says.

"By today's standards, we exercised an inordinate amount of patience. The main thing was not to be threatening and to show that we did appreciate their style."

Henseler doesn't think it would be possible to take a similar approach in the current M&A environment. "The process has become much more formalized, and a great deal more competitive," he points out. "Acquisitions now are primarily made via auction in a competitive bid process that has increased the multiple of annual sales you have to pay for a company. This was especially true in the mid to late 1990s, when the multiples hit seven times EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization). You have to cut costs as much and as soon as you can to justify that kind of price."

More by coincidence than design, Henseler found himself in the middle of another major industry consolidation, but this one having nothing to do with Banta. At the urging of the company's then chairman, Calvin Aurand, the finance whiz got involved with the Graphic Arts Technical Foundation. "The association had been going through a stressful time in terms of budget problems, and Cal thought I could make a contribution given my administrative background," he explains.

Merger of PIA, GATF
Over the period of about 10 years, Henseler made the progression from GATF secretary to treasurer and on up to first vice president. Ultimately, he was elected to serve a term as chairman, right in the middle of GATF's consolidation with the Printing Industries of America.

"My tenure as chair began as the merger was being finalized. That was an interesting experience," he recalls. "The whole industry was going through a period of consolidation, and suppliers were struggling with the duplicity of industry associations—and their corresponding requests for donations."

According to George Ryan, GATF president, "Gerry's financial background was invaluable in helping us evaluate the effect the consolidation would have on both organizations in terms of reductions in membership dues.

"He offered a vision for what the move was going to mean to both organizations," Ryan continues. "Gerry's leadership during the consolidation process was outstanding."

Given all the market and technological changes the printing industry is facing, one might expect Henseler to be a little nostalgic for the past.

"There are still going to be a lot of exciting opportunities ahead for the industry and Banta specifically, but it is going to be a challenging environment," he predicts. "In the early days there was more time to celebrate successes. Today, you celebrate a success by taking a deep breath, and then it's on to the next challenge."

When his retirement day does roll around, Henseler admits he will miss the thrill of making acquisitions. However, he says he has found the greatest satisfaction in blending organizations and seeing Banta grow and prosper. With the company celebrating its 100th anniversary this year, he can envision Banta making it to 200 years—and still making acquisitions along the way.

"In order for companies to continue achieving double-digit growth, acquisitions will have to remain a large part of the industry," the 2001 Hall of Fame inductee continues. "There are relatively few large printers and, at most, the biggest players individually account for less than 10 percent of the U.S. print market. There still are numerous opportunities to create additional value by crafting acquisitions that make the puzzle pieces fit together.

"Banta, for example, has extended its product offerings to include a whole range of project management, procurement, kit assembly, order fulfillment and distribution services," Henseler points out.

"We also have created a dual business platform with our supply chain management sector, which primarily services the major technology companies on a global basis."
 

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