CEO Jim Sheffield shares UBEO’s acquisition strategy and what’s next for his rapidly growing organization in an exclusive interview with The Cannata Report.
(Pictured above UBEO’s Jim Sheffield in his office with an unused riding crop of the legendary race Horse Secretariat. The crop is a metaphor for excellence.)
Jim Sheffield, CEO, UBEO Business Services in Austin, Texas, started selling copiers during his senior year in college in 1984. Since then he’s seen a lot and done a lot working in various capacities with different organizations before launching several companies formerly known as DOCUmation of Austin, Documation of East Texas and Documation of North Texas beginning in 2004. Today, UBEO is a $200+ million upwardly mobile organization that is growing rapidly through acquisition (and organic growth). Last year UBEO Business Services partnered with Sentinel Capital Partners, a private equity firm that has provided the company with the resources to grow.
Can you share with me UBEO’s mission, and I imagine it’s probably difficult to talk about UBEO without mentioning Sentinel Partners, correct?
Sheffield: Well, yeah. They’re a partner. One of the reasons we partnered with them is because they let us run the business. UBEO started as a Texas company. We started from basically nothing 15 years ago. We wanted to build the premier brand in Texas from a customer-relation standpoint. We’re now taking that philosophy, with the assistance of Sentinel, and trying to be the premier brand in our industry from a customer service standpoint.
How many acquisitions have you made so far?
Sheffield: Six since April 2nd, 2018 when we closed our deal with Sentinel. It’s been a short, sweet run. We’ve more than tripled our size and since April 2nd of last year and are in the revenue range of some of the biggest players in the country.
What makes a good acquisitions target?
Sheffield: When I look at us compared to the competitive acquisitions landscape, we’re finicky. When you’re trying to build the premier brand name in the industry, you better be picky because we want companies that have our core values. Our values are how we treat the customer, and if you’re not the premier provider in your market or you don’t have a high aspiration to be that, we’re probably not your choice.
We’ve walked away from deals. That’s one of the first things that we ask. If somebody doesn’t have really high aspirations, we’re probably not interested. When you put deals together like this, everybody needs to be on the same page as far as core values or else you have problems. Most of our management team are old ALCO people. Before that, we were part of the Hillman Group, if you go back that far.
Can you further elaborate on your core values and why they are essential to UBEO and potential new partners?
Sheffield: We talk about excellence a lot in our organization, and a commitment to the customer in the way of thinking of excellence, quality, and value. But the overall customer experience is what we’re really looking at. We make all our decisions based on three criteria: One, what’s best for the customer. Two, what’s best for our employees, and three, what’s best for the company. We’ve found if you focus on one and two, three takes care of itself.
Are there certain markets you’re more interested in than others?
Sheffield: We’re wide open. We want to be in all the best markets in the country. We have aspirations to be in the East and are working towards that. The smaller companies that we’re buying, we’re able to fold them under our wing, whether they are out West, South or in the Central part of the country. Hopefully, we can find stronger dealers that can be our core in the particular areas where we want to be.
One of the things I’m always curious about with the various PE firms that are acquiring and even dealers, is what’s the end game? Is the plan to sell, keep growing, etc.?
Sheffield: We’re building a brand, the UBEO brand, that is going to be here, essentially for whatever forever means in our industry. That was one of the goals that we wanted to do when we started seeking out institutional backing. For us, Sentinel was very up front with where they wanted to take us. I’ve said this in front of them, they’re a very, very important stepping stone for UBEO. They’re going to take us to a revenue number that they are comfortable with. It’s going to take several years. That’s their goal and the middle market that they operate in. Then, we will move to another organization that will provide us with capital to continue our venture. The Sentinel people are comfortable with that and we’re comfortable with that, and we’re up front about that with everyone we talk to. And we’re very up front with that with our employees. This is a long-term play for sure.
When we talk again a year from now what will the UBEO organization look like?
Sheffield: Right now, we’re in the same ballpark size wise as Visual Edge and probably Oval Partners, which is FlexPrint. We started late to the party, but we’ve done a good job catching up and are well in excess of $200 million in revenues. If you and I talk again in a year, I expect we’ll be well in excess of $300 million in revenues. We will have also made some major league big-time hires and we’ll be in other parts of the country. The main thing, our customers are going to be extremely happy with us and our employees are going to be extremely happy with us because everybody wants to work with a winning team.
(Editor’s note: Look for more insights from Sheffield about UBEO and the company’s acquisitions strategy along with those of the industry’s other big acquirers in our June issue.)
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