After owning Dake Corp. for nearly 80 years, Grand Haven-based JSJ Corp. found what executives believe is the right partner in Irvine, Calif.-based Laguna Tools Inc. to position the metalworking equipment and machine tool maker for the future. The sale comes as JSJ hones its strategy to focus on the high-growth companies within its portfolio, which includes auto supplier GHSP, label maker McLoone, engineered metal solutions provider Hudson Technologies and Sparks Belting Co. Chairman, President and CEO Nelson Jacobson spoke with MiBiz about the drivers behind the sale and how JSJ looks to invest as it begins to bring on board the fourth-generation family members of the company’s founders.
Why did JSJ decide to sell Dake after nearly 80 years?
Sometimes we have to look in the mirror and (ask): Are we really the best owner? There might be somebody that’s really focused on this business. The product’s iconic. It’s a premium product, an incredibly well-respected brand; it had always been consistently successful. But it’s different than what our other businesses are really focused on, and that’s the integration of a range of technologies to provide an innovative solution. As we kept thinking about the future, one of our core purposes is to make sure that we are in a position to allow people to learn and grow. With Laguna, it just all felt so right.
What does the deal do for JSJ?
What it’s allowing us to do is to focus on the businesses where our greatest strength is the ability to bring a range of technologies and capabilities and integrate them into a value-added solution. … We are very blessed with a lot of organic growth opportunities and we continue to look for opportunities to globalize our businesses. GHSP has a very significant presence in China — to make product to sell in China — and in Mexico. Hudson Technologies is opening an operation in China to sell to sensor manufacturers … throughout Asia.
It also sounds like JSJ will be looking for acquisitions as a result of this sale.
We’re definitely open for acquisitions, even though things are a little expensive these days. We’ve said we’re interested. We put our name out on the streets, and we get a lot of solicitations — almost every week. … We’re looking to organic growth, but we have more M&A activity than we’ve ever had. … The other important thing is we’re open to partnerships, too. Today, with the capital intensity and the speed of things getting a bit faster, we’re looking for partnerships.
Is JSJ looking at M&A any differently now than it has in the past?
(M&A) goes in waves. We weren’t doing a lot of deals in ’08, ’09 and ’10, that’s for sure. We were trying to survive. Since then, we bought several companies, and we’ve always done partnerships. I think it just depends on the timing. We might be looking at more today, and that would probably be for the speed of bringing in a capability within the electronics area, within decorative. But we just did an investment in a company called UV Angel. We’re a minority shareholder in that; we’re their manufacturing partner. That’s an example where that brought us into an entirely new market. We brought in a new capability, disinfecting, and we can apply it to our (current markets).
Given the investments in the new headquarters and R&D lab in Holland, does GHSP take a leading role in the growth strategy for JSJ?
A leading role? It’s kind of hard to say. … Part of it just has to do with what opportunities come up. … Our job is to look at all of the different investments and decide how to allocate the capital and where do we think the return is. It’s no secret that GHSP is certainly by far the largest business we have. It has businesses within itself. But saying that, we’re starting a business for Hudson in China, which we believe will be far bigger than Hudson is itself. … It’s really the responsibility of those of us here at JSJ to prioritize and make sure we have clarity on which (investments) provide the best return and whether we should do it ourselves or buy somebody or partner with somebody.
Has your advisory role at venture capital firm Grand Ventures given you insight into where you want to see JSJ go in the future?
It’s a real learning curve when you see how fast some of these companies can create value. It’s been very educational for me. It’s humbling when I sit down with two or three University of Chicago grads and none are over 24 and they have got these ideas and have put businesses together. It’s a very healthy engagement for us to be in. … I think it’s incredibly healthy that there’s so much of this activity happening in West Michigan. That’s a very positive step.
How is JSJ starting to look ahead to the next generation of family leaders?
There’s no question our responsibility is to have a very relevant, resilient company for the fourth generation. We’re increasingly engaged in that initiative. … This year (Executive Vice President) Erick Johnson has made tremendous progress in getting our fourth-generation group organized. A number have joined the company, both as employees and consultants. They’re engaged. It’s a bright future. The work we’re doing is important because they have made it clear they want us to continue, and that makes us happy. That’s also good for West Michigan that an old-line company like JSJ can keep reinventing to stay relevant.