Case Study 2: Pinnacle Network Systems,  East Greenwich, RI Has acquired Spencer Engineering & Consulting Synopsis:   For Pinnacle Network Systems, a rapidly growing network consulting firm, acquiring Spencer Engineering & Consulting, the “Cadillac” of their industry, greatly enhanced their growth and capabilities. With technicians located coast-to-coast, the combined companies offer their national customer base technical expertise and service second to none. When Growing Means Buying To David Strickler and Bill Sahagian, founding Pinnacle Network Systems in March 1998 was a logical next step for these two veterans of the networking industry. David Strickler explains, “As an entrepreneur you´re always looking for ways to grow your business. Acquiring a company that is synergistic to yours is a great way to grow. We were informed that the owner would entertain an offer. We had a relationship with some of the management staff at the company and were able to establish a dialogue. Spencer Engineering pioneered the Point-of-Sale installation business. They were one of the original companies to perform national rollout work. We took Pinnacle, which had eighteen months of experience, and added twenty-one years of experience by purchasing Spencer Engineering.” Building on Faith and Trust Even for a skilled entrepreneur like Strickler, this was not a deal he could do alone. “As soon as I saw that there might be an opportunity, I got in touch with Rocco Pezza, the President of NEBC. Rocco´s name had first come up some time ago, when a company I had previously owned was looking for some investment capital. He´s really honest, someone I knew I could trust. So we went down this path together. It was Rocco´s insight, his faith in me, his belief in the strength of the deal and that we could pull it all together, that made it happen.” Vision and Perseverance “ NEBC really gave us a 120%. Rocco went beyond what I think most brokers would do. He put the book together and marketed it to different bankers and institutional investors. He coordinated meetings with those banks and investors which we were interested in and eliminated those we weren´t. Rocco also negotiated the financing and the costing associated with the financing, making it possible for us to purchase the company.” Strickler is quick to point out that it wasn´t as easy as it might sound. “The deal had its ups and downs, and at one point it fell through. The interesting part about it was that Rocco never lost faith. He encouraged me to stay in touch with the people at Spencer, to call them once a week, or at least once a month and see how things were going, and sure enough, the deal was resurrected when the conditions at Spencer changed. The seller became more motivated and said, “Look, I´m definitely going to sell, I´ll give you first rights to make an offer before I go on the open market.” Keeping Customers Satisfied For Strickler, the acquisition of Spencer has been a life changing experience. “I am having more fun than I have ever had working in my entire life. My role is different. This particular purchase has lifted me up out of the bowels of start-up companies and has put me at the helm of a much larger company with a whole different set of dynamic issues. I am now in a strategic thinker role.” Strickler has every reason to be proud of the new division he has added to Pinnacle Network Systems, “We are in tune with them from a service standpoint. When a store goes down and the store manager doesn´t really understand the systems, we have the expertise to walk them through it, or get the right people there, with a sense of urgency.” Building a Partnership Clearly Strickler is pleased with the outcome of his collaboration with NEBC. “Rocco basically acted as a quarterback and coached us on how to interface with the seller, to position ourselves, and to strategically think through the meetings and conversations we were going to have. All the things that Rocco did to facilitate the purchase make clear the benefits of using NEBC. Rocco is NEBC as I know it. He altered his program and was able to bob and weave and work with us.” Though clearly not always easy, Strickler characterizes the two year period leading up to the completed deal as quite enjoyable. “But that is not the end of the story,” Strickler adds, “Rocco is going to be on our board and help steer the company.”