After running as lean as possible in the years following the recession, West Michigan manufacturers are embracing acquisitions as a strategy to add capacity and meet customer demand. That was the case Mill Steel Co. when it acquired assets of S&S Steel Services after the company fell into bankruptcy as a result of a tumultuous steel market and excess inventory. The acquisition underscores the larger M&A climate in West Michigan and elsewhere in which manufacturers are acquiring other firms to increase their capacity, said John Kerschen, managing director of Charter Capital Partners, a Grand Rapids-based M&A firm and investment bank.
“We’ve seen acquisitions that are capacity-related (because) we’ve had a pretty good stretch here in the economy and some suppliers have needed to keep up with their customers,” Kerschen said. “Those may be things like international expansion, new automation and technology — and those are big expenditures.” On the other hand, as some executives grapple with a lack of capacity in their operations, it’s encouraged them to sell, he said. “We’ve also seen some deals where a seller may not want to sell but may not have the capability to follow their customers.” Read more at MiBiz