In today’s fast-paced manufacturing industry, embracing technology is essential for boosting productivity and achieving operational efficiency. At Dane, our innovative mindset naturally leads us to strategic technological advancement which allows us to better serve our customers.

One strategic investment, our STOPA automated storage and retrieval system signaled a significant shift forward in our capabilities and efficiency in serving our customers.

What is STOPA?

STOPA is the world’s leading manufacturer of advanced automated storage systems designed for storing raw materials, semi-finished goods and tools. Renowned for its accuracy, dependability and scalability, the STOPA system seamlessly integrates into our current production operations, offering numerous benefits including autonomous material handling, real-time inventory management, and unlocks 4^th shift automated production.

Implementing STOPA was a complex and time-consuming task, and our implementation reflects years of expertise in manufacturing operations, combined with our innovative forward-looking mindset to leverage the new technology. The project began with the first piece of the system arriving at Dane Manufacturing in October 2022, and continued until April 2023, before becoming operational.

Unlocking 4^th Shift Automated Production

STOPA is more than just a material handling and storage system. By integrating automation modules within the STOPA system, we are able to unlock fully automated processes expanding production capability and efficiency.

Currently, our STOPA system is integrated with the following equipment:

• Two Trumpf 5000 Punches
• Two Trumpf 3030 Fiber Lasers
• Trumpf 7030 Automated Panel Bender

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“STOPA is more than just an automated storage tower and material handling system. It allows us to feed sheet metal through various processes without ever being touched by a human. Since integrating STOPA into our daily operations, we’ve seen performance improvements that have benefited our customers directly.”

Al Wenger — Production Manager

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These performance improvements are evident in several key areas including efficiency, space optimization, inventory management and safety:

• Efficiency: Automating our storage and retrieval process has cut down on time and labor, resulting in faster processing times, fewer errors, higher productivity and shorter lead times.
• Space Optimization: By maximizing the use of vertical and horizontal space, we can handle more materials and products without needing additional floor space. This increase in operational efficiency supports higher production volumes and scalability for our customer’s future growth.
• Inventory Management: Enhanced inventory control with real-time tracking and precise counts helps us maintain optimal stock levels and improve order accuracy. This translates to timely updates and accurate deliveries for our customers.
• Safety: Automation has reduced the need for the manual handling of heavy materials, leading to less forklift traffic on our production floor. This creates a safer environment for our productions team and ensures more reliable, consistent service for our customers.

Improving the Customer Experience

Our STOPA system has resulted in a number of significant performance improvements enhancing the speed and accuracy of our customer’s manufacturing processes. In addition to increased capacity positioning us to handle our customer’s growth, we’ve tightened our inventory management processes resulting in increased efficiency, real-time reporting and reliable production lead times. Perhaps most notably, the overall efficiency that our STOPA system creates, allows Dane to initiate production starts more than 48 hours faster than was possible prior to its implementation. Additionally, we have been able to reduce cell-to-cell and process-to-process starts by 24 hours.

Looking to the future, our STOPA system, and the automation it provides, creates numerous growth possibilities for our customers. We are well-positioned to leverage technology as our customer’s needs continue to grow. Our inventory storage is tightly managed and kept at optimal levels, and we also have the capability to add additional state-of-the-art machinery to our STOPA system. As a result, we are positioned to scale rapidly and efficiently, while maintaining the efficiency gains we’ve realized, keeping costs favorable to our customers.

Innovation is part of our DNA. The implementation of STOPA represented a significant strategic leap forward for Dane. Many months of strategic planning culminated in one of Trumpf’s premier integrations of STOPA, which has subsequently been studied and reviewed by third parties as a model to be duplicated in future implementations. As a result, Dane is well positioned to leverage technological advancements to exceed our customer’s expectations well into the future.

Have questions about our automated STOPA system, or want to take a tour of our facility to see it in person?

We’d love to talk. Contact Us.

 

Our clients are always looking for top notch results. In many cases, laser cutting is the ideal manufacturing process. Laser cutting provides an efficient method for creating complex shapes, higher sheet utilization and gives us a great deal of capability.

We are always looking to innovate through the use of leading technology.  Our approach to laser cutting is no exception.  Through a combination of premium equipment, and refined quality processes, we provide our customers with excellent results.

Laser cutting technology has a unique history that is marked by innovation and continual improvement, two staples in Dane Manufacturing’s culture.  Let’s take a quick look.

History of Laser Cutting

The first concept of laser cutting was originally conceived in 1917 by Albert Einstein who created the original scientific concept behind the modern laser. What proceeded was a rapid period of innovation and growth that would shape the use of laser cutting in manufacturing.

1960: The first ever working laser is created by Theodore Maiman. His design using a synthetic ruby laser was met with skepticism.

1964: Scientists at Bell Labs saw potentional in Maiman’s invention and set out to improve on it. They developed thermal cutting techniques by inventing a gas laser using CO2 mixture.

1965: Western Engineering Research Center becomes the first to apply the concept of laser cutting to manufacturing.

1969: Boeing company becomes the first commercial user of gas laser cutting equipment, who applied the technology to its production lines in an effort to create a more efficient manufacturing process.

1979: Prima Industrie out of Italy invented 3D laser cutting technique that expanded its capabilities and potential uses in manufacturing.

1980s: After 20 years of development, the first commercial fiber lasers hit the market, further expanding the capabilities and applications suitable for laser cutting.

Laser Cutting Technology at Dane Manufacturing

Here at Dane Manufacturing, we prioritize innovation and strive to continually provide our customers with the best metal solutions around.  Doing that requires us to regularly invest in premium caliber equipment, and to train our teams to use them effectively and efficiently. Our laser cutting equipment is no exception.

Our partner, Trumpf, is one of the world leaders in laser cutting technology.  We run multiple Trumpf 3030 machines with reliable TruFlow lasers that produce extremely high cut quality.  The Trumpf programming software that guides our lasers to cut to exceptionally tight tolerances and parameters, is second to none. Combined with our automated STOPA storage system that allows us to run automated production schedules 24 hours a day, we have the perfect laser process for the production of your laser-cut parts.

 

At Dane Manufacturing, we pride ourselves in delivering premium performance end-to-end metal fabrication services to our customers. But for us, its about more than the metal. It’s about our customer’s experiences, our ability to serve them and being a partner they can trust.

We embed this into our culture but delivering on this commitment starts with our people. We believe that our strongest asset is our employees, who impact every interaction, experience and the outgoing product that our customers receive.

Building a workforce that creates such a strong advantage starts with selecting the right employees. We look for energetic, hard workers and believe that the quality of our employees, and their continued development, is the key to our success. We look for specific characteristics in our employees and then invest in them regularly. The payoff? Efficient processes and an innovative and energetic workforce ready to meet our customers needs and do whatever it takes.

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Finding the Right People

Finding the right people can sometimes be a challenge. Fortunately, our community and the surrounding areas provide us a good supply of candidates. We look for the candidates who will value and appreciate our culture and mission and look for these 10 characteristics.

• Honesty
  Honesty is a non-negotiable for us. In fact, one of our core values is acting with integrity. We look for employees who uphold this core value and know that it is critical to being a company our customers can trust.
• Accountability
  We hold each other accountable and do what we say we are going to do. This is a reflection of our culture at Dane Manufacturing and we constantly do our best to live up to this standard with each other, and with our customers.
• Energy
  Things can sometimes move quickly around here! We look for employees who are energetic and eager to be part of our team so that we can adapt, change and improve rapidly.
• Drive
  At Dane Manufacturing, we’re chasing big goals. Whether it is one of our growth strategies, or an investment into our current capabilities, we never stop chasing improvement. We need employees who are driven and highly motivated to succeed.
• Ambition
  We have high expectations and look for employees who are eager and not afraid of taking on new challenges.
• Heart
  We believe that the people around us have value. Whether it is a customer, a coworker or a member of our Waunakee community, we expect our employees to be respectful and considerate to all.
• Grit
  We value employees with a solution-oriented mindset and expect our people to overcome challenging situations and obstacles.
• Productivity
  In a fast-paced environment our employees are asked to work diligently and prioritize each day so that we are effective and efficient at getting the right things done well.
• Fearlessness
  Our team members need to be ready for the challenge and confident in themselves.
• Crazy
  Yep. Slightly crazy is ok. Crazy enough to believe that we can accomplish impossible things through hard work and teamwork.

That may seem like quite a list, but each one is important. When employees possess these qualities, they are more likely to go above and beyond in their work, consistently delivering high-quality results, and they’ll be dedicated to getting things done on-time.

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Investing In Our Employees

Of course, it’s about more than just hiring the right employees. We focus on taking good care of them once they are here. We want our employees to continue to develop, grow and be challenged. We offer continuing education programs, in-house learning programs and regularly invest in employee perks and incentives, appreciation events and more. Why does it matter? We believe that the success of our business and our ability to treat our customers to the service and products they deserve depend on the satisfaction, well-being and enrichment of our employees.

Our commitment to selecting the right employees and investing in them regularly is part of our vision to be the premier metal fabricator in the region and to continue providing premium products with over 98% on-time delivery. We want our customers to know that they are highly valued, and we aim to be a trusted member of their team.

 

We are pleased to share that Dane Manufacturing has been listed once again in The Fabricator’s Fab 40 for 2023.

Each year, in collaboration with manufacturers around the country, The Fabricator reviews company performance and identifies the 40 most successful metal fabrication operations based on revenue. We are pleased to be included amongst this list of our outstanding peers.

At Dane Manufacturing we are constantly calibrating our company vision to consistently operate as the premier metal manufacturer in the Midwest.  We continually adapt and grow our processes, innovate through the use of new technology and strive to expand our capabilities. In an effort to continue serving our growing customer base with excellence, in 2021 we consolidated all operations into our new manufacturing facility increasing our manufacturing space to over 400,000 square feet. Shortly after, we recertified our company to ISO 9001:2015 standards ensuring quality processes and continual improvement. Importantly, while we pursue these new initiatives, we aim to grow without losing focus on our mission to enrich the lives of our employees and deliver personalized, customer focused service.

Most importantly, we express our appreciation for our customers, whose trust allows us to continue pursuing our goals. To our many customers: Thank you for allowing us to be a part of your team.

To learn more and review the Fab 40, visit: The Fabricator Fab 40.

 

In November 2022, Dane Manufacturing CEO Troy Berg joined the Axial.net’s Masters in Small Business M&A Podcast to discuss Dane Manufacturing’s history and rapid growth story as a metal solutions provider.

In the early 2000s, Troy and his family acquired Dane Manufacturing, an 85 year old manufacturing company with a good reputation for quality products. Through an entrepreneurial spirit and a desire to innovate and grow, Troy and Dane Manufacturing experienced several years of rapid change.  Now, after moving into a new facility with over 400,000 square feet of space and acquiring new cutting edge technology, Troy looks forward to future opportunities to grow, to continue investing in his employees, and to bring Dane Manufacturing’s metal solutions to new customers.

In this podcast Troy joins Peter Lehrman at Axial.net for a candid conversation looking at Dane Manufacturing’s growth story.

Highlights:

• Hear Dane Manufacturing’s origin story including how Troy’s Mom gave him her life savings to help him buy the company
• Starting fast: Solving customer’s problems and growing from $1M to $6M in the first 5 years
• Hear Troy reveal lessons he learned as a leader that were limiting Dane Manufacturing’s potential
• Goal Setting in 2015: A 3X growth plan in 3 years (Read More Here)
• Dealing with the pandemic while still growing a business
• The outlook for the future – after increasing capacity and facility space, Dane Manufacturing is free to explore opportunities in organic growth and through M&A.

This podcast was conducted by Peter Lehrman at Axial.net.  If you’d like to see the original article and podcast, you can find it here: The Making of Dane Manufacturing, a 21st Century American Manufacturing Growth Story

 

Metal part leveling is an essential capability provided by Dane Manufacturing.  When steel manufacturers form and cut metal, the final result is not always perfectly flat due to stresses and tension within the material. But customers need their parts and finished metal goods to be produced with precision.  The process of part leveling can create and maintain flatness by passing the sheet metal through a series of closely arranged rolls, it is leveled out and stresses are relieved. As a result, our precision at the beginning creates flat parts that improves our downstream processes helping to ensure a quality finished part.  You can learn more about why this process is so critical here.

Precision Levelers from Kohler

Our Kohler Peak Performer machinery produces precision leveled parts that are high quality, improve downstream processes and meet flatness requirements.

Want to learn more about part leveling?
The Importance of Part Leveling in Metal Fabrication
Learn More at Kohler

 

The sheet metal and plate that gets delivered to a metal fabricating company looks flat enough. But looks can be deceiving, and that is especially true with metal. What might seem flat at first is likely to lose its flatness during fabricating.

This makes sense when you consider what happens to the raw material before it’s delivered to the shop. Sheets and plates come from the mills in coils. In metal service centers, these coils are uncoiled, straightened, and finally cut to length. Although the sheets appear to be flat, they still have stress inside. (The stress is evident in the material’s grain.)

When these materials are cut using a thermal power source, such as a laser or plasma cutting machine, the stress is released, and the results are obvious. Parts become uneven. This goes for both thin and thick metal parts.

This also goes for both ferrous and nonferrous parts. The use of the assist gas during cutting actually plays a large part in this process. For example, when oxygen is used for cutting carbon steel, the oxygen reacts with the metal in an exothermic reaction. That introduces a great amount of heat to the cutting zone, which allows the cutting process to occur rapidly. (The byproduct of this chemical reaction is an oxidized edge, which needs to be cleaned to allow for paint adhesion.) The additional heat, however, also releases more stress in the metal. Cutting with nitrogen, an inert gas, reduces the heat input when compared to oxygen, but even with the gentler process, stresses are still being released.

This can become particularly troublesome for the fab shop with new laser cutting technology because some parts may tilt on the slats after being laser-cut and become an obstacle for the cutting head, especially when cutting speeds reach 30 m/min. or more and acceleration of more than 2 m/s² has become the standard. A very expensive piece of fabricating technology runs the risk of being wrecked by an uneven part on the cutting bed.

Any blanking process is able to release stress first introduced during coiling. That stress probably is most evident in the metal’s springback after the cutting or punching is done. (Punching works the material to the point that additional stress is released in material. This can be seen on the newly perforated parts, for instance.)

Combating the Material Stresses

What are metal fabricators to do to combat the stresses introduced during coiling and released after the parts have been cut or punched? This is where a part leveling machine can help. It can deliver flat parts for applications in which it is absolutely necessary for downstream fabricating processes to receive leveled parts to help ensure higher productivity and fewer rejects during bending and welding.

A part leveling machine delivers flatness through a series of rollers that apply pressure to the sheet metal or plate part. The rollers work the material as it makes its way through the machine. The intensity of the pressure applied to the material reduces and eventually eliminates the stresses that are introduced at the metal service center.

How are those rollers organized? That depends on the material, the material thickness, and the desired specifications. The variables of a part leveling machine include:

• The number of rollers.
• How the rollers are spaced in the machine.
• How the rollers are arranged and supported.
• Stiffness of the roller frames and the entire machine.
• Support of rollers (supported length, arrangement of rollers).
• A gap control system and its ability to keep the gap stable.
• Electrical power consumption efficiency.
• Ease of cleaning leveling and supporting rollers and of maintaining the machine.

The leveling process can deliver a high degree of precision, but it really depends on the application and on the thickness and type of material. For example, a leveling machine can deliver flatness of 0.5 mm/m to 1 mm/m for parts destined for cranes and mining equipment and that would be considered very good. That flatness, however, would not work for a manufacturer of saw blades, which require 0.1 mm/m or better. Fortunately, the same part leveling machine that delivers acceptable parts for the heavy equipment manufacturer can produce even more high-toleranced parts for the saw blade manufacturer.

By elongating the metal, the machine’s rollers destress and flatten the parts.

As it relates to the size of parts to be leveled, it all depends on the roller diameter. Each roller diameter in combination with spacing of the rollers and the design of the roller frame, supporting roller, and the machine frame has its specific window of operations. In general, small roller diameters are used for thin material, and bigger rollers are used for thicker material. Leveling machines typically can flatten parts from 0.2 mm to almost 70 mm.

Reaping the Benefits

Part leveling can help metal fabricators increase output and productivity. Reports from metal fabricating companies that incorporate a part leveling machine into their operations indicate that after leveling parts, they are about 25% more productive in their bending operations. The leveled parts bend up more accurately, which means less rework and more consistency. In the welding department, that translates into parts that fit into simple jigs and have consistent gaps. Welders are happy. Fewer rejects are the result, and productivity is increased. This is especially true with robotic welding. The tighter and more consistent gaps result in less filler wire being used, smoother seam lines, and a faster automated process.

This article was originally published by The Fabricator in August 2021.  For more information, visit www.thefabricator.com. The original article can be found here.

ABOUT THE AUTHOR
Dr. Hans-Peter Laubscher
Managing Director
Wintersteiger, Metal Division/Kohler Maschinebau GmbH

 

In July 2015, Dane Manufacturing CEO and president Troy Berg and COO Mike Lisle set an audacious goal of growing the company 3X in 3 years — from $10 to $30 million.

Troy had owned Dane Manufacturing, a metal fabrication and stamping company based in Dane, WI, since 2001. He had just brought Mike on board as COO, and they were sitting down for their first of many weekly off-site meetings when they hatched the plan. “Mike said to me, ‘Well, what do you want to do here Troy?’ and I said, ‘Mike, let’s 3X this thing in the next three years,’” says Troy.

They knew this was a bold goal; that’s why they were attracted to it. Troy called it not just a BHAG (Big Hairy Audacious Goal) but a “F-BHAG” (use your imagination).

The pair knew that they’d need both organic and inorganic growth to achieve their goal. By 2016, Mike and Troy had doubled down on sourcing acquisitions, and in March 2017, Mike came across as a deal on Axial that seemed immediately promising, and which had the potential to help them reach their goal. The company was Dantherm Cooling, a supplier of energy-efficient climate control solutions.

“My first email to Troy with the one-pager was: ‘This looks very interesting. It also looks like it could be a bit distracting.’ That would turn out to be prophetic,” laughs Mike.

Prophetic — and an understatement. The 15+ month deal process threw curveball after curveball at Mike and Troy: a failed bid, a bankrupt parent company, a long-time bank backing out at the eleventh hour, and more.

The 15+ month deal process threw curveball after curveball at Mike and Troy.

So how did they pull it off? In this three-part deep-dive, we cover:

• The history of Dane Manufacturing (and why Troy’s mom is really the hero of this story)
• How Mike and Troy got tight around their acquisition criteria
• What to do when a bank says no
• The travails of negotiating with a Danish bankruptcy trustee
• How Troy and Mike used Axial to come in under the wire

Thanks, Mom

In 1996, Troy had started an engineering services company. By 2001, he’d managed to grow it to 5 employees and just under half a million dollars. But he was growing frustrated with their business model. “Selling time by the hour is an OK model if you’re a lawyer and getting $200 an hour. But if you’re an engineer and you’re getting $75 an hour, it’s a hard way to make a living.”

He became aware of Dane, at the time an 85-year-old company with a team of 10. “It had been a husband-and-wife operation, but the husband had passed away and the wife was left to run it,” says Troy. “I was the 15th person to call on her in seven years to buy the business. She held on to make sure she could get the best price and the best person to make sure the company carried on.”

For Troy, buying Dane was an exciting opportunity to scale and transition from an services model. But two weeks before closing, his investor backed out. “My mom stepped up as the hero,” says Troy. “She went out and remortgaged her house and gave me almost all of her life savings.”

The deal closed on November 20, 2001. “It was right after 9/11,” says Troy. “I watched George W. Bush stand in that pile of rubble in Manhattan and say, ‘The terrorists don’t know who we are now, but they will hear from us soon,’ and I told my little crew of 12 people at Dane the same thing. ‘The world doesn’t know who we are now, but they will hear from us soon.’ My vision was to put the company on the map as a premier metal manufacturing company.”

With his mom’s money on the line, Troy dug deep to bring his vision to life. “I just went out there and started shaking things up,” he says. I scratched together every nickel I could get to buy our first new machine. My goal was just to grow.”

“I scratched every nickel I could get to buy our first new machine.”

At the time, Dane made primarily small stamped parts and old-fashioned sheet metal ductwork parts, primarily for the housing industry. “The items we made you would see during the construction of a house, and afterwards you wouldn’t see them,” says Troy. “We had levels of industry and customer concentration that were really scary. We needed to diversify and grow or we were going to get wiped out in the next housing construction downturn.”

Grow they did. Under Troy’s leadership, Dane went from $1 million in 2001 to $12.5 million in 2015. It wasn’t a straight line. “We grew from a little over $1 million up to $6.5 million, then the Great Recession came and after that we grew back up to $10 million. But we had a hard time breaking $10 million. Finally we broke the barrier there, and got to $12.5 million,” says Troy. The company’s success was recognized: Dane made the Inc. 5000 list in 2007, 2008, 2009, and 2013.

During that time, Dane’s customer base evolved as well. The company went from making “hidden parts” to producing recognizable parts that have key applications in a wide range of consumer products: architectural metal for elevator cabs, joint plates and corner guards for airports, handrails for hotels and conventional centers, job boxes for construction sites, and more.

“He Needed a Mike”

Dane was doing well. But by 2015, Troy was overwhelmed. Too much of the decision-making depended on him, and he knew he needed help to get the company above $12 million. He reached out to Mike Lisle, a finance executive and old friend of his who had been working as a controller in a janitorial company, and asked him to join as COO.

When Troy proposed the 3x goal, Mike was more than game. He’d come to Dane from a company that had suffered a tough decline after several successful years. “We’d lost two key customers and morale was low. You wear a lot of that on your sleeve when you’re the financial guy, and while we all shared the responsibility, this was a situation where I knew that one of the other key leaders had really dropped the ball,” he says.

Troy and Mike put their target at somewhere north of $30 million. At the time, Dane was bringing in $11.2 million in sales. Soon after setting the goal, they sold off a non-core division of the business to a small PE firm, lowering annual sales to around $10 million.

As the CEO and president of the company, Troy had an obvious incentive to hit the mark. But Mike made it personal too. He vowed to get Dane to a $30 million company before his previous company got back to $30 million. “It sounds so stupid and petty, but it fit with where Dane needed to be. Troy had done a lot of work to get the company to $12 million, and he was hitting a plateau. He knew he couldn’t do it himself anymore. He needed another Troy type, another full company leader. He needed a Mike. Sure, the goal was a little audacious, but it was something we could comprehend and attack.”

“All my friends were like, ‘Bullshit, you’ll never make it. That’s crazy.’”

Troy didn’t keep their goal quiet. He knew that he needed to light a fire under the team if they were going to succeed. When he told fellow CEOs at the executive coaching organization Vistage about Dane’s gamble, they scoffed. “All my friends were like, ‘Bullshit, you’ll never make it. That’s crazy.’ But I said, ‘Nope, we’re going to make it and we’re going to get our fifth Inc. 5000 award. We’re going to join the ranks of Amazon, Google, Microsoft, Apple.’ And my friends were like, ‘Yeah yeah yeah. You know you’re just a metal manufacturer, right Troy?’”

Challenge accepted.

“A Small Acquisition Is Just as Much Work as a Big One”

By 2016, it was clear that Dane would need some serious inorganic growth to reach their goal. “Dane had done a few smaller acquisitions, but we knew we had to look bigger,” says Troy.

The team became aware of Axial around the same time. “I’ve never been a fan of the way business brokers and intermediaries go to market with companies. It’s never been efficient. I told Mike, ‘Look, we have to accelerate our acquisition strategy because I’m not finding things the way that I used to. I think a lot of these intermediaries just died, or retired, or went to sleep because I can’t find anything. They’re not here.’ But lucky for us, we found Axial.”

Troy and Mike decided to join Axial in August 2016. “Yes, it cost a bit of money. But we could see right away that the people on Axial were there to do deals. They were there to make connections and talk seriously. We had seen too many brokers and accountants and lawyers go hot and cold and not know who they were representing that well. It made it challenging to get anything done. But on Axial we found good write-ups and reliable information. The folks representing companies on Axial were, in general, extremely knowledgeable about the companies that they had shared. As a result, we could make a really quick ‘let’s pursue’ or ‘let’s decline’ decision.”

Troy and Mike began working with their Axial account manager, Levi Cohen, during their weekly check-in meetings. “As Levi always says, the work in the acquisition is just as hard if it’s a $10 million acquisition or a $1 million acquisition. So, we decided to raise our sights a bit together,” says Mike.

“We painted a picture of what a successful acquisition would look like and then evaluated every opportunity through that lens.”

Troy and Mike outlined exactly what types of acquisitions they were — and weren’t — looking for. “We painted a really tight target around what we wanted. If a deal didn’t hit our criteria, it didn’t matter how good it sounded or familiar it was. We painted a picture of what a successful acquisition would look like and then evaluated every opportunity through that lens.” They were looking for a proprietary product business, which would allow them to control their destiny a bit more by selling directly to the customer. The product itself had to depend on quality sheet metal. Dane didn’t have an extensive marketing team in-house, so they wanted an existing brand. They also wanted to something that was relatively predictable — “not susceptible to wild swings in the economy,” says Mike.

They found a few promising deals, but nothing that panned out. Then, in March 2017, Mike came across the Dantherm Cooling deal. Dantherm was a division of Dantherm A/S, a publicly traded Danish company originally formed in Spartanburg, SC in 1998. The company provided climate control and air handling solutions to North, Central, and Latin American telecom, industrial, and oil & gas markets and was looking to add new products.

“Pursue It”

Troy and Mike sat down to review the deal. “Every Thursday we would review deals against our criteria. We said, ‘Pursue it,’ to the Dantherm deal pretty quickly. It hit all our criteria.” There was an opportunity for Dane to manufacture much of the metal that Dantherm was currently buying, and Dane saw a lot of potential to capitalize on their market position and the fact that Dantherm was already a global company.

When Troy and Mike connected with Dantherm’s M&A advisor, there were already multiple suitors. But Dane made their interest known and moved quickly. “Within ten days, we were in Chicago to do our first in-person vetting with the president of the company,” says Mike. “We saw all kinds of potential.”

It quickly became clear that the deal wouldn’t be a simple one. “Dantherm had had a banner year in 2016, but when we first saw the company in April of 2017 they were already well beneath that banner year — but there wasn’t a great sense of why,” says Mike. They also learned that earlier in 2016, the company had almost been acquired by a company that looked a lot like Dane, but the buyer had walked away.

Those details raised a bit of doubt, so Troy and Mike quickly flew to South Carolina to visit the company’s headquarters. “We saw immediately that the culture was similar to Dane’s. We knew we had not just a good product fit but a good cultural fit.” On the Friday before Memorial Day, they issued an LOI. “We were on a high — it was the last day before a long weekend, and we’d found something that hit all our boxes to help achieve this huge goal.”

By the following Tuesday, Troy and Mike’s hopes had been dashed. Another group had made a higher offer, and now that company was in a 90-day exclusivity period with Dantherm.

Still, Mike didn’t lose hope. He had a feeling Dane might get another shot at the business. He knew that the company that outbid them had never visited Dantherm. “I’m no valuation expert, but I had a hard time believing the buyer was going to close at that price, because Dantherm’s foundation was a little weak. I just had a gut feeling the exclusivity period would expire.”

Mike may have been confident, but Troy was getting nervous. Three years was coming up soon, and they would need a Hail Mary to make good on their 3x goal.

Three years was coming up, and Dane would need a Hail Mary to make good on their 3X goal.

Rather than fixating on a potential failure, Troy channeled his energy into sales. Dane landed a $5 million contract and then a $2 million contract. “That gave us the runway for Dane in 2018 to be $20 million. And if we could close Dantherm then we’d be there. We’d get to ring the bell at 3X,” says Troy.

The only thing to do was wait until the end of summer, when the other suitor would either close the deal with Dantherm — or their exclusivity period would run out.

“The Days of 20 Suitors Are Over”

Right before Labor Day, Troy and Mike got word from Dantherm. The other buyer had backed out.

Mike and Troy jumped at the second chance — but were also shrewd enough to know that the balance of power had shifted in their favor.

At this point, not only had Dantherm been through two failed closes, but Troy and Mike had also learned that Dantherm’s parent company in Denmark was bankrupt. Dantherm was now being managed by a Danish bankruptcy trustee. “They weren’t paying very close attention to the business nor were they investing in growth. They were just focused on getting a buyer. We knew that our leverage was growing. The time for 20 suitors was six months ago,” says Mike.

Dane was able to negotiate a lengthy exclusivity period — one of the rewards of staying in the game — and Mike, Troy, and Dane’s finance team set out to secure financing.

“Nope, Not Us”

2017 had been a great year for Dane and 2018 was poised to be even better. In November, they signed their largest contract ever for a three-year deal. Even without the Dantherm acquisition, Dane was poised to grow 50-60 percent year over year. But Dane’s long-time bank took one look at the Dantherm deal and said they weren’t interested.

“It was genuinely shocking,” Mike says. The bank had previously helped the company simplify their financial structure and prepare for growth, including redeeming Troy’s mother’s preferred stock, streamlining real estate structure and loans, and converting from a subchapter C to a subchapter S organization. “They knew we were doing all these things to do a deal, to do multiple deals,” says Mike. “However, not only was Dantherm not repeating its 2016 performance, but they were really nosediving. The bank looked at the Dantherm financials and was worried about its impact on Dane. And they said, ‘Nope, not us.’”

Though Dane had a huge contract spinning up in 2018, “the bank was only interested in the historical angle,” says Mike. The sheet metal business is inherently capital-intensive. “Each of our machine tools is north of a million dollars. And you have to have a lot of them to be running the volume we are. So, it’s a very high fixed-cost business,” says Mike. “Our bank had concerns about Dantherm’s cash flow and how much of Dane’s cash we would have to bring into the company.”

Their hesitation didn’t erode Mike’s confidence in the deal. “It just depended on your perspective. I’ve spent 15 years in the financial side of organizations. I’m used to saying ‘No’ to deals and being risk-averse. But in this case, I was appalled that the bank couldn’t see our vision, the track record we had. It just didn’t add up to say no to this deal.”

“I was appalled that the bank couldn’t see our vision.”

Mike emphasizes that he didn’t make the decision to keep going lightly. “Troy and his wife Michelle are godparents to my daughter. I’m the trustee of his estate. The last thing I’m going to do as a financial manager to my friend is to put his family and livelihood in a high-risk place.”

The Fight for Financing

Troy and Mike set out to find a new bank. They secured some SBA financing, but needed more. “It was more challenging to find the right deal financing than it had been the right target. When it came to deal sourcing, things were a more binary — it had to meet our criteria. But with financing, we had a lot more people saying, ‘Well, we could…’ We did our elevator pitch ad nauseum,” says Mike.

Given Dantherm’s current state, it quickly became clear that asset-based lenders would be the best fit for the deal. “In May 2018, on one of our famous Thursday afternoon meetings, we pulled up Axial, ran a search, and found Crestmark Bank,” says Troy. Crestmark was an asset-based lender with a strong presence in Chicago, just a few hours away from Dane’s headquarters.

Mike had also met Scott Frederick, a vice president from Concord, previously at Axial’s Concord event in Chicago, but at time Dane was still planning on using their existing bank for the Dantherm deal. Now, though, they reached out to Scott immediately.

The next day, Friday, Scott drove to Dane’s headquarters and met with Mike and Troy for six hours. “It was nine hours in the car from Chicago. But I cancelled everything for the next day and drove there because I sensed Troy and Mike needed help and I knew that time was not on anyone’s side in this acquisition. In the current lending environment, time kills deals. I came away from the meeting thoroughly impressed with their vision for the company,” says Scott.

“In the current lending environment, time kills deals.”

Within two weeks, Dane had closed with Crestmark. “It was lightning speed for a $3 million line of credit facility,” says Troy.

“At the end of the day you had a motivated team in Dane Manufacturing and a motivated bank in Crestmark, and Axial brought us together,” says Scott.

Meanwhile, In Denmark

The financing wasn’t the only thing tying up the deal. Because Dantherm was being managed by its bankruptcy trustee in Denmark, Dane kept hitting walls when it came to deal terms. “We couldn’t hold money in escrow or do an earnout, or do an asset purchase. He wasn’t a manager staying on or an owner with skin in the game. He needed a clean, quick deal that we could take to his creditors. He couldn’t give us the typical reps and warranties that you would normally get if your seller was going to be out for good. Whether that was Danish law or posturing, I still don’t know — but he said he couldn’t go there,” says Mike.

As the process stretched on, Mike and Troy worried more and more about keeping the trustee on board. “He was worried about our financing. So, we knew we had to keep him engaged. We proactively shared our financial prospect pipeline on a weekly call. I don’t know that many sellers would get that level of engagement with the buyer, but we offered it because we didn’t want to lose the company.” Given Dane’s growth and its capital-intensive business model, “we knew that we couldn’t write the biggest check,” says Mike. “We didn’t want someone else with our same vision but without our capital tie-ups to come in and offer more.”

The team at Dantherm had been through a rollercoaster of failed deals over the past few years.  “One transaction after another had fallen through for us,” says Rick Schmidt, current chief technology officer at Dantherm (and at the time the company’s chief operating officer).  “It was hard to keep employees motivated. If an employee left it was hard to find a replacement employee. You’re trying to keep your customer base happy and do all the things you should be doing from a business standpoint to grow and improve, but you have this big distraction looming over your head.”

Mike and Troy were concerned with keeping the Dantherm employees invested in the business.  “We knew the longer the deal took, the more depleted and less engaged the team would be,” says Mike. “We bought a lot of potential; we didn’t buy financial performance. We really needed their people to stick with us, so we made visits on site and also invited members of their team to our headquarters in Wisconsin. We really tried hard to get them excited for what was ahead.”

Rick picked up on the cultural similarities between Dane and Dantherm during the deal process. “Mike’s high-energy, Troy’s high-energy, and that’s very similar to how myself and the other managers here operate. We’re both companies that have gone through a lot of challenges and grown over the years. Both are the type of place where you pull together when you have to. There’s not that, ‘That’s not my job’ mentality. It was clear that Dane was coming in to help us move forward and continue to create a good foundation for the business.”

Coming In Under the Wire

Troy and Mike had challenged themselves with the 3X goal on July 9, 2015. The Dantherm deal finally closed on June 28, 2018.

“We made it by a week,” says Troy. “Almost three years to the day we set that goal, we closed Dantherm giving Dane Manufacturing consolidated annual sales of $32 million — with Dantherm making up the last third of that number.”

“We made it by a week.”

Needless to say, “It was a great July 4th,” says Troy. “Shortly after we received a bottle of champagne from the Axial team. It was awesome, because the deal wouldn’t have happened without Axial.”

Says Axial CEO and founder Peter Lehrman, “As a CEO I know how risky it is to publicly put yourself on the line for a stretch goal like Troy and Mike did with their team at Dane. It’s easier to set the bar low, but it’s not nearly as gratifying when you clear it. The Axial team was watching this Dane deal from the sidelines, and we were so completely elated when Troy and Mike let us know that they’d closed it. At Axial, we really live for these moments where we know we’ve helped move the needle for one of our members.”

Now that the deal is done, Dane has plenty of work to do to integrate Dantherm and continue to grow both teams. Dane replaced Dantherm’s previous president with Greg Kaye, who they connected with through Vistage, and Dane and Kaye have been working together to help Dantherm overcome its financial struggles.

But Troy and Mike have also given themselves permission to celebrate their success. “Sometimes you have to take your nose off the grindstone,” says Troy. “You have to let yourself enjoy the feeling of accomplishing the BHAG and reliving the story. You’ve got to remind yourself that you just went up another level. Three years ago we had 60 people. Now we have 125. As an owner, you have to take time to celebrate and smell the roses, because there’s always a lot to do. Work never goes away.” He adds, “Shawn Achor, who wrote The Happiness Advantage, sums it up best when he says, ‘One of the challenges we have in America is we don’t ever slow down long enough to be happy.’ We achieve the goal and then immediately move the goalposts.”

The financial goal of 3Xing the company kept Mike and Troy going, and ultimately pushed Dane to the next level. “But I have to be careful not to define myself around the sales or the money,” says Troy. “The most important thing is people, and how many people can we bring with it. I’ve always tried to measure my success by jobs. If I’m making jobs and sustaining jobs and seeing the same people day after day, year after year, then I know I’ve made an impact. Otherwise we’re not doing it right.”