Hoffman shows off its new Volvo flag along with Old Glory from its corporate hedaquarters in Piscataway, N.J. This partnership between Volvo and Hoffman will ensure success for both companies through their next 100 years!
"Hoffman Equipment is proud to announce that we have been named the Volvo Construction Equipment dealer serving the NY/NJ/PA metro area."
The foregoing sentence headlines the Hoffman Equipment website more than a year after the acquisition was finalized, which tells you all you need to know about the importance of the deal to the 100-year-old company. And to think it nearly didn't happen
Hoffman CEO and President Tim Watters recalled the deal-making.
"I tried to buy it (Penn-Jersey Machinery) about a year earlier, but someone else made a better offer. I admit I moaned and groaned a bit when the other company got it, but I knew that company couldn't really afford to buy it at that number. It took awhile, but when they finally realized the numbers wouldn't work, that deal went south and we leaped in … though I'm oversimplifying things a lot."
And just like that — not to oversimplify things — Penn-Jersey Machinery's Volvo three locations in Pennsylvania and New Jersey and accompanying territorial rights in New York State became part of Hoffman Equipment. Watters said the ensuing transition of people, machinery and accounting nuts and bolts went smoothly. His CFO, Eric Shumaker, agreed.
The chief financial officer formerly worked at North Carolina's Cone Mills, then the world leader in denim-making, at a time when the U.S. textile industry was consolidating before imploding from the pressure of cheap foreign labor. Consequently, Shumaker is fully familiar with the potential for helter-skelter when two companies' operations are merged. In this instance, it was avoided.
"When we started up a few days after closing the transaction for Penn-Jersey, we were up and running and I was able to do a financial report," he said. "There were a few errors, but we figured out what they were and plowed through it. We needed to be able to do that, we needed to be able to keep on running."
The size of the financial management task he faced in the deal is suggested by the fact that inventory, sales, office locations and number of employees all nearly doubled in one swoop.
Now fully transitioned, Hoffman is the authorized dealer for Volvo Construction Equipment at six of seven dealership locations, giving the company a new advantage as it competes against other dealers in the Northeast. The situation is a win-win, as Hoffman Equipment's takeover of the former dealership is proving a boon for Volvo customers, too.
"From what I hear, it's going great for our new Penn Jersey customers," he said. "Our studies show their satisfaction is significantly higher now than before. And why not? They've been given an immediate increase in parts availability — a 400 percent increase across all the branches — and we've doubled the number of technicians available to work on their machines, all being managed by a management team that is local and a known player within this market. The changeover has generally been a really good experience for the Volvo owner."
Such customer enthusiasm and confidence is a great asset for a company. It can't be bottled or cashed out, but it smooths bumps in the road and greases sticky situations. It's a priceless asset. Watters believes Hoffman Equipment generally is esteemed by the people who buy and rent equipment from it and entrust their ailing machines to Hoffman technicians.
"If asked, I think a customer typically would say we are a good company to deal with, a company with integrity, fair, and putting the needs of customers at the forefront of what we are trying to do here," he said. "They like our people and, I think, generally like me and enjoy doing business with us."
As the Penn-Jersey transaction recedes from view, Hoffman Equipment moves ahead invigorated by the acquisition and bolstered by a growing economy. Watters feels both currents pulling the company ahead.
"It's a nice environment for us and everyone else. Our progress right now is a consequence of what we are doing and the economy is doing. It's more than just a good economy. It's us doing what we're doing, too."
Note that it's what the company is "doing," not "done." Hoffman Equipment management is showing no signs of resting on its laurels. While the president said he doesn't have another acquisition in the works, "I guess I'm not done taking risks. I have some pretty strong ideas."
One of those ideas is that doing nothing does not well-serve Hoffman Equipment.
"There's risk in status quo," said the president. "I might argue there is more risk in status quo than there is in change. There's more risk in standing pat than in actively changing and growing and anticipating where the market will go. That's the reason we're doing just that."
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