GRAND RAPIDS — One of Sagestone Consulting founder Keith Brophy’s largest concerns a year ago was how he would control the spin, both internal and external, of his company’s acquisition by Troy-based NuSoft Solutions.
Sure enough, within weeks of the merger, Brophy, now NuSoft’s president of business development, began hearing the rumors.
He was leaving to start “the next new thing.” He had retired and was going to devote his days to philanthropy. The firm was moving out of its office. It was shifting its offerings. It was leaving
“I was concerned about reassuring everybody; I knew that there would be some concern about our future,” Brophy said. “I found that I couldn’t really control the buzz — and heard some comical things.”
What troubled Brophy was not the rumors — which he took for one part innocent gab and one part competitive positioning — but the immense concern that West Michigan had lost another business and even more jobs in a year dotted with such news.
“There is a lot of concern on the market because so many great companies have been pulled away,” he said. “Acquisition is a dirty word on the surface, and the initial reaction was that another West Michigan business was being pulled away.
“But we’re still running it as a Michigan company and I’m still looking for Sagestone, now NuSoft, to become the best national technology provider in Michigan.”
Although it was such a high priority, Brophy never figured out how to reassure his employees, customers and peers. Instead, he let action be his reassurance. He renewed his lease for five years and redecorated the office. Of the 40 employees hired company-wide this year, half were in West Michigan.
The former Sagestone had some visible accomplishments in Grand Rapids, including being named Microsoft’s Best Partner in the district last spring, and a pair of highly successful Web sites for National City Home Mortgage and Zondervan Bible Search.
Generally speaking, when two service companies merge, there is a decrease in revenue by about 30 percent, Brophy said. Not so at NuSoft, where revenues are up nearly 30 percent, with the company projecting a $25 million first year.
“We’ve exceeded our expectations for growth and revenue,” Brophy said. “We took some steps right out of the gate to move the company forward, and we’ve quickly become one integrated NuSoft.”
Brophy attributed this to the common elements between the two companies. Both shared a passion for technology and had business models focused on transformation and impact. Brophy and NuSoft CEO Dale Mansour had different leadership styles, but they proved complementary, and were easily able to share power from their respective cities.
Plus, Sagestone had long concentrated on custom solutions. With NuSoft, it has been able to offer holistic service, and as a result, its core offerings have flourished.
In shopping his company for acquisition, Brophy, alum of IBM and X-Rite, knew he needed to find a buyer like NuSoft.
He was tired of the roller-coaster challenge of financing his company’s growth, and knew that he needed some help to build the national brand he imagined. He investigated venture capital and acquisition by East and West Coast companies, but knew that such a deal would have undesirable ramifications for the company and community. A national player would have likely ramped down the West Michigan office, importing talent and business to other regions.
With its current size and position, Brophy believes his 170-employee operation is “right-sized for the industry” and poised for significant growth. Also, he is enjoying the new status quo.
“It’s been wonderful; I’m having more fun than I have in years and feel like I’m accomplishing more,” he said.
That attitude has spread throughout the company. At the former Sagestone offices, turnover is the lowest it has been in five years.
“In any field, employees want to have a lot of opportunity ahead,” Brophy said.