Inside an Acquisition: Terra Nova Integrated Systems, Ogren Electronics

After Terra Nova Integrated Systems acquired Ogren Electronics they said something that companies always say after completing a merger:

“The acquisition combines the talents and financial strength of two of Wisconsin’s most successful electronic systems integrators.”

A press release added some pertinent details, like that Eagle River-based Ogren, which is 250 miles north of Eagle Waukesha-based Terra Nova, will continue to operate independently, maintaining the brand it built over 20-plus years.

Ogren’s executives have been retained. In fact, only one redundant administrative position was eliminated as a result of the merger. Prior to the acquisition, Ogren had 10 employees and Terra Nova had 16.

The two companies won’t reveal the financial terms of the acquisition.

CE Pro wanted more insight into the acquisition, so we asked Terra Nova founder Chris McCanles and Ogren president Dave Ogren.

Does the acquisition of Ogren bring Terra Nova new strengths or markets?

McCanles: Ogren serves a different region of the state. Like us, they’re well-diversified in their offerings, serving business and residential customers from low- to high-end, with a variety of systems: security, automation, communications and audio/video. The purchase makes our company even more diverse, a good tool in a tough economy.

In a challenging economy, how is Terra Nova financially able to pull off an acquisition?

McCanles: We did better than average in 2009 based on [CE Pro’s State of the Industry report]. We were down like everyone else but we proved to our bank and financial advisors that we were capable of dealing with things proactively. This was critical in the bank’s decision to finance the deal.

The bank liked the fact that we had worked hard at managing our companies finances and really liked Ogren Electronics, how they had run their company, the goodwill they had in the community, the lack of competition (and the virtual barrier in place for new competition in the area), and the willingness of the Ogrens to stay involved with the company over the long term.

[Editor’s note: Mary Alice Ogren assumes VP-design role overseeing both companies; as Ogren VP-operations, Dave Ogren oversees that division’s technicians and service.]

As they say, truly good deals stay good regardless of the economy. Had any one of the components been lacking, it wouldn’t have happened. But the bank saw that the new entity would likely be better than the sum of its parts.

How was Ogren’s 2009 business?

Ogren: While not to the level of 2008, we were very happy with 2009’s performance.

What was the biggest motivation for Terra Nova to acquire Ogren?

McCanles: The Ogrens have built a great company. The value you’re seeking when purchasing a company starts there.

Their customers really love them. They have great people working for them. They’re profitable and well-managed. And they’re well-diversified. They simply got to a point where they wanted help in growing.

We get along very well and I was enthused by the possibility of working with them to grow our companies collectively.

What was the biggest reason Ogren allowed itself to be acquired?

Ogren: In the age of ever-changing technology, bringing Terra Nova's strengths that are different from Ogren’s to Northern Wisconsin will be an asset to the growth of Ogren Electronics and an asset to northern Wisconsin.

Besides, I'm really old and still listen to 8-track tapes and AM radio.