Thinking bigger at Brady

While many corporate development teams are in a holding pattern, waiting for the M&A market to revive, Brady Corp. is charging ahead with some ambitious growth initiatives. Leading the effort is Scott Hoffman, who in January took over the new position of vice president of strategy and business development. A 23-year Brady employee who previously was VP of Brady Americas, Hoffman has a twofold mandate: Build a business development team to pursue organic growth opportunities and complement the M&A group and lead Brady's expansion into adjacent spaces.

It's a considerable shift for Milwaukee-based Brady, which had $1.5 billion in sales in its fiscal 2008 and makes "identification solutions" like signs, software, high-performance labels and precision die-cut parts for electronics components.

Teams pursuing inorganic and organic growth opportunities had traditionally been separate, and Brady's global expansion strategy to date has been driven largely by acquiring firms that support its core businesses.

"We decided, for what Brady wants to become in the next three to five years, we needed to start building more depth in astute strategists in our business, and that included at the corporate level," says Hoffman. "And while we haven't run out of core spaces to acquire in, having done 28 deals in six years, we felt we needed to start broadening our approach with a clearer strategy around adjacent spaces."

Hoffman has in the past six months hired three corporate-level business development managers, bringing his direct reports to seven, and worked with a top-tier consulting firm to develop a systemic approach and methods to identify promising new markets.

Brady now has a list of 15 and is prospecting for targets in the three with the greatest potential. And with the company's transaction and new-business development specialists working together, Hoffman can think more strategically about how best to gain a foothold in those markets.

"Before we would have been two separate teams with different focuses, motivations and, honestly, bonus structures to support those motivations. Now we're one team working together, and I have more levers to pull. I've got the M&A and partnership levers, and I've got the organic levers, which could be new customers, markets, geographic expansion, new-product development and/or a new technology play. It's only been six months, but it's already proven to be very valuable."

So when will Brady start doing deals? When sellers get realistic about valuations, says Hoffman.

"We have had a close eye to protecting cash, and it's been no surprise in this market that businesses that believe they're ready to sell have what we view as unrealistic pricing expectations. That's definitely slowed down our closing deal activity, but it hasn't slowed our appetite for prospecting."