An Inside Look at UBEO’s Acquisition of Centric Business Systems

Above: Jim Sheffield

On January 18, UBEO announced that it had acquired Centric Business Systems in Owings Mills, Maryland. The acquisition represents the second largest of the 18 that UBEO has made to date. For the record, its 2018 acquisition of Ray Morgan Company has been its largest.

In an exclusive interview with The Cannata Report, we spoke via Zoom with Jim Sheffield, president & CEO of UBEO, and Rick Bastinelli, president of Centric Business Systems, about the acquisition and what it means for both organizations. The following interview has been edited for brevity and clarity.

Frank Cannata, founder and editor-at-large, The Cannata Report, and Rick Bastinelli, president, Centric Business Systems

CR: Rick, why was this a good time to make this move?

Bastinelli: At the beginning of the fourth quarter [of last year], we got together with the senior management team and started putting together our five-year business plan. Our goal was to double the company from $60 million to $120 million. When I looked at what it would take to accomplish that, given an unpredictable view of the document imaging industry, I started thinking that the timing was right to align with a larger, more powerful organization that had the size and scale to create a sustainable future for the company. That’s what motivated me to make the move.

CR: What made UBEO stand out for you compared to some of the other major acquirers?

Bastinelli:  UBEO brought the size and scale and the ability for us to have access to world-class products and provide more support from a solution point of view. Our go-to-market strategies were very similar. They had a high focus on production, a high focus on software, and a high focus on wide format. And they were all part of our strategic plan in terms of what we were focused on over the next five years. Being part of the larger organization gives our people a lot more stability and security and provides a more sustainable path for the company in the future. We became stronger and we became more powerful by being aligned with an organization like UBEO. It came down to who was the best match for us? We looked at several acquirers and they’re all great people and great companies, but it came down to who met the criteria that I just discussed also where was the best culture fit?

CR: Tell us about that culture fit.

Bastinelli: I did my homework, and some of the things that mattered to us were that we wanted the name to remain Centric Business Systems and have our distinct brand in the marketplace. We wanted to retain all our employees in the role that they had previously. It was important that I had the opportunity to remain on as president and run the company on a day in and day out basis. We built this company focusing on the customer experience and the employee experience. The more we got to know about UBEO and who they are and how they operated, we realized that they were a great match from a cultural point of view.

CR: How does that sound to you, Jim?

Sheffield: We’re proud that Rick picked our team. We’re a match from a cultural standpoint. We’re not a perfect match for everybody. If it’s not customer first, employee second, and the organization third, we’re probably not the right fit. That’s how we make all our decisions. We said that to Rick in the beginning and I think he was attracted to that. Centric Business Systems is a fabulous company. I’ve got to tell you, and Rick was nice enough to tell me how good it was from the very beginning, but the thing that was fun about it was that everything that he told me was right on the money. He’s got a great financial team and his management team are super people. I’ve tried to surround myself with great people and I think Rick has too.

CR: What’s UBEO’s presence in this region now or will it be Centric Business Systems’s?

Sheffield: We have a solid presence in Connecticut and Massachusetts. We’re in Boston. We’re in New York, we’re in Pennsylvania. We’ve made about five acquisitions up there. Rick’s logistics organization is top of the line, and he solidifies us in that area.

CR: Are there regions of the country you would still like to have a presence that you do not at this point?

Sheffield: Long term we want to build a national company. But we have to be prudent. We want to be the premier customer experience company in the industry. That’s our forte. We’re not trying to be the largest company in the business. That’s why culture is so important. We’re big out west. We’re in Denver, we’re in Nevada, we’re in Texas, we’re in Louisiana and we’re in the Northeast. We could do something in the Southeast. To deliver the level of service that we want to deliver to our customers, you need a certain logistical presence.

CR: And you’re looking to acquire dealers of a certain size, correct?

Sheffield: We’re not doing little. We wouldn’t do a little deal in Florida just to get into Florida right now. We would rather build around our strengths which are out west—Texas, Louisiana, and in the Northeast. That’s our focus right now. But if there’s an opportunity for us to do maybe three deals or two deals or one deal in a different region of the country, we’re very open to it because long term that’s what we want to do.

CR: Rick, how have your employees responded to the acquisition?

Bastinelli: It’s been a very exciting time for them. The initial reaction was more emotional, but once they got past that, which only took a couple of days, they realized that the company became much more secure and stable because it wasn’t contingent upon the health and wellness of one individual. They recognized that there was a tremendous opportunity for growth, not only within the company but within the UBEO organization. They recognized that the company had a much more sustainable path for the future. It has created a lot of excitement from senior leadership right down to our team members.

CR: And how have your suppliers responded?

Bastinelli: I think they’re all delighted too. UBEO is one of the largest Ricoh dealers in the country. And I think that Mr. Coriddi was very pleased to learn of this association. Sharp was super excited because they see this as an opportunity to grow with UBEO and expand their footprint larger into that organization.

CR: At the beginning of our conversation, you were talking about mapping out a five-year plan. Are you planning on being around for the next five years?

Bastinelli: Scott, do you have a crystal ball that I could borrow? I’m like your boss, I love what I do. It’s in my blood. I love the people I work with. I love the customers. I love the vendors. I’m super excited about the leadership at UBEO. It’s a great team. They’re professional, they’re industry experienced, they’re knowledgeable, they know the right things to do. They also know what not to do and that’s why they’re going to be immensely successful. So, I’m having a lot of fun. I’m enjoying what I’m doing, and I think you can expect me to be around for a while.

CR: Jim, what are your expectations now that Centric Business Systems is part of the UBEO organization for Rick and Centric?

Sheffield: We’ve already started the integration process. Rick had some questions for me early on and like what if we buy another company near him, how’s that going to work out? Well, the first thing we’re going to do is talk to him about it. We respect Rick’s knowledge of the industry, we respect what he has built, we respect his professionalism. I think he warmed up to stay on longer than maybe he was thinking in the beginning and he’s welcome to stay as long as he wants. We’re going to continue to methodically execute. As more acquisitions become available to us, we’re going to continue to do that as well. But as I said earlier, the most important thing for us is that we are the premier customer experience company in the industry. Every day when we come to work, that’s where we start. If we get a lot bigger over the next few years, that’ll be because we’re doing a good job at Plan A.

CR: Rick, when you hear Jim say “the premier customer experience company,” that’s right in your wheelhouse at Centric Business Systems, right?

Bastinelli: You’re right. That’s how we built the company and that’s why our cultures were very much aligned. The thing that impressed me the most is that Jim and I had a lot of conversations before entering into any kind of agreement. And we discussed every aspect of the business and how life would be afterward. It’s one thing to have those conversations, but it’s gratifying to know that everything we’ve discussed has come to fruition and is rolling out exactly as planned. Part of my commitment to being here is for my team. I want them to excel and I want to continue to support them in any way possible. I want our customers to benefit from this relationship and collaboration and the additional power of the products that we can provide to them. And I want to be a big part of helping UBEO to grow and achieve its organizational goals. The platform we have here in the Mid-Atlantic region can be a great launching pad to help them grow in the Eastern region.

CR: Jim, this is your first announcement of the year. Is it likely to be your biggest acquisition of the year? I know it’s only January, but what’s available size-wise, like Centric Business Systems, that is a viable target?

Sheffield: Well, multiple companies. There are some good size dealers that we are in the early stages of talking to. We anticipate having a busy year.

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What the Rest of the Industry is Saying about the Acquisition