Dan Abbate is a Contributor on the Price of Business on Business Talk 1110 AM KTEK on Bloomberg’s home in Houston (learn more about Dan at www.robotaton.com).
Dan recently interviewed Dan Eberhart, Chief Executive Officer of Canary LLC since 2009. His primary responsibilities include managing operations; corporate finance; customer, employer, and public relations; overseeing the company budget and expenses; and supervising integration efforts. Eberhart has personally overseen the acquisition of the eight companies that currently comprise Canary. Under his leadership, Canary has grown to become the largest privately held wellhead company in the U.S.
Before he joined Canary, Eberhart served as vice president of acquisitions for Greene’s Energy Group, LLC, in Houston. In this position, he was responsible for the leadership, direction, and performance of the company’s business development efforts. He was also involved in budgeting, planning, and negotiation with oilfield companies. Prior to this role, Eberhart served as the vice president of acquisitions for Oklahoma-based Robson Energy, LLC. At Robson, Eberhart worked on divestments and acquisitions valued between $500,000 and $35,000,000.
Eberhart attended Vanderbilt University and earned degrees in economics and political science. He earned his Juris Doctorate from Tulane Law School.
DAN: Hi Dan! Thanks for taking the time to talk with us today. Can you tell me a little bit about your firm?
Dan E: Canary is based in Denver and is one of the nation’s largest independently held oilfield service companies. It was also recently named to Inc. Magazine’s Inc. 5000 list, which recognizes the 5000 fastest-growing private companies in America. The company has grown 285 percent during the past three years, and we now employ 373 employees in every major shale play across the country.
DAN: Today’s interview is all about companies in active growth phases and how they manage that. Can you tell me about your current growth. What’s your strategy? What will your company look like at the end of this phase? How are you managing this?
Dan E: Since our founding, we have maintained a strategy focused on growth by acquisition. We are always looking to help quality companies transition to the next stage of growth.
Our core philosophy is not “buy and sell”, but “buy and contribute”: We seek out companies with established track records and give them the tools they need to spur healthy expansion — tools like proven management strategies, marketing capital, and a national footprint. We bring new opportunities to these companies and their employees — but, just as importantly, we preserve and honor the legacy, culture, and teams that have made each company strong.
DAN: In your experience, what was/is the most important thing for you to consider in developing your growth strategy?
Dan E: When developing a growth strategy, it is essential to keep customers at the center of it all. Growth is not only about expanding your company, but also expanding your capabilities to serve your customers more efficiently and more effectively.
With Canary, our acquisition strategy is equally about our customers. We integrate new companies with existing services and locations to provide a wider base of national services to existing customers. We now have operations in every major shale play in the U.S., so our customers enjoy a one-stop shop for drilling services. This strategy has been a win-win for our customers, our existing holdings, new companies under management, and, of course, our overall portfolio growth.
DAN: What is one thing that a company seeking to enter a growth phase should keep in mind? What pitfalls are there to avoid?
Dan E: Phases of sustained growth are exciting times for a company, but they can also be accompanied by a number of unforeseen issues and complications. To anticipate and help fend off these issues, depending on the growth strategy, there are a few things that should be priority number one.
For companies growing through acquisition, the integration period following an acquisition is a vital time for a company. This process should be dealt with on a case by case basis and the timeline should be reviewed regularly to ensure the correct processes are put into place and that there is clarity among all parties involved. This can help avoid a lot of the growing pains that come with the combination of two companies.
For companies expanding through organic growth, maintaining a consistent company culture and not compromising the quality of their products or customer service are the top priorities. Different customers and regions have different needs, and maintaining the balance of synchronization without breaking tradition is a difficult process. To accomplish this, a company must place emphasis on internal communications to guide the company’s efforts and ensure the quality of the company is not compromised or strained through the growth process.
DAN: What does a high growth rate demand of your organization and staff? How are you addressing this?
Dan E: A growing company naturally leads to multiple organizations coming together to work under one mission and vision. And with this influx of talent and resources, it calls for a company to develop and maintain the flexibility that is necessary to work with multiple people and organizations to achieve the common goal of providing excellent products for our customers.
With respect to Canary, we have experienced this first-hand and at a very high frequency, having completed 14 acquisitions since our founding. To address the demands brought on by accelerated growth, we have placed emphasis on consistently reviewing existing processes and, when necessary, establishing new ones to ensure we are able to accommodate our expanded reach and workload. These processes range from developing more sophisticated methods for filing and accounting to maintaining open lines of communication with customers.
In order to successfully transition new companies into the fold, it is important that the talents and capabilities of the workforce are being distributed equally and that roles are clearly established. Integration is a make or break process for a company, and we are always looking to update and improve our best practices for navigating the relationship between existing managers and new hires.
DAN: Thanks so much for taking the time to talk with me today, Dan. I appreciate you sharing your experience and knowledge and I love hearing about interesting people and companies doing interesting things. You can find out more about Canary LLC and its business capabilities on the company website at www.Canaryusa.com, on Facebook at facebook.com/CanaryConnects, and on Twitter @CanaryConnects.
Do you have advice on growing your business? Tell me about it! Email me at dan (at) robotaton (dot) com.
