During what he calls a “terrible soccer game” his son was playing, Ademir Sarcevic picked up a recruiter’s call that would change his career. The game was lopsided, but the timing was fortunate. Within months, Sarcevic was interviewing with Standex International’s leadership team. By 2019, he was CFO of the diversified manufacturer, helping guide a portfolio that spans precision electronics to specialty machinery.
Sarcevic’s readiness for that moment was shaped years earlier in Sarajevo. He came to the United States during the Bosnian war in the mid-1990s, an experience that taught him to “be ready for anything.” His first job after graduate school was at General Instrument Corporation, where a finance rotational program exposed him to audit, FP&A, and accounting. Later, at a pre-IPO company, he helped take the firm public—only to see the dot-com crash unfold immediately after. It was a lesson in resilience and the unpredictability of markets, Sarcevic tells us.
Read MoreInternational assignments added new perspectives. In Paris, he served as controller for a billion-dollar Tyco business, and in Switzerland he became CFO for a Pentair global unit. Along the way, he experienced more mergers, acquisitions, and divestitures than he can count, reinforcing the value of flexibility and objectivity.
At Standex, Sarcevic applies these lessons through a disciplined M&A approach. Every acquisition, he tells us, must meet three tests: “strategic fit, financial sense, and culture.” That rigor has paid off—recent acquisitions, he notes, “have been phenomenal…performing better than we even thought.”
CFOTL: Just to start, tell us about Standex. Then we’ll talk more about your industry.
Sarcevic: You’re exactly right, Jack, and maybe I’ll go back a little bit to the history of Standex to give you a sense of how we got here. We’re an engineered components company that partners with OEMs, our customers, to provide solutions. What’s interesting is that our products are all around you, but you may not realize it. For example, we make small electronic reed switches—so if you have alarms in your house, chances are some of our products are in there. When you drive your car, the interior design likely comes from our engraving business. If you go to CVS or Walgreens for a vaccine, the doses are probably stored in a Standex refrigerator. Even at airports, when you grab a sandwich, it may have come from a cold storage unit we made for Hudson News.
Read MoreWe operate today in five business segments, with a focus on high-growth end markets that we expect to expand significantly. But our portfolio transformation is still in progress—we’ve said publicly that we want to narrow down to three larger, more customer-intimacy-focused segments. If you look back 15 to 20 years, Standex had as many as 20 different businesses, everything from grapefruit farms to Christian bookstores to candle shops and commercial refrigeration. Over time, the board and leadership began to streamline the portfolio. Today, we’ve reached a point where the businesses we own are high-performing and cash-generating, but we continue to refine and simplify.
As for how I ended up here—I was chief accounting officer at Pentair in 2018–2019. One weekend, while watching my son’s soccer game (and it was a terrible game—they were losing badly), I got a call from a recruiter. They were looking for candidates for the CFO role at Standex, initially to reach someone I knew. After talking for 15 minutes, I said, “How about me?” I had known David Dunbar, Standex’s CEO, from my time at Tyco. That connection helped, and soon after I visited New Hampshire to meet David and the executive team. The culture fit was amazing, the opportunity for value creation was obvious, and six years later, here I am.
CFOTL: I know there have been a couple of recent acquisitions, including one at the beginning of this year. You’re accelerating growth through M&A. How do you integrate new businesses, and how do you measure their performance?
Sarcevic: Every acquisition we pursue has to meet three criteria. First, there must be a clear strategic fit—it has to place us in exciting growth markets where we can gain an edge. Second, it has to make financial sense. We run a wide range of models to determine what the business is worth to Standex and to test worst-case scenarios. If the numbers still hold under a “doomsday” case, then we know we’ve got a solid deal.
The third criterion is culture, and it’s as important as the other two. We usually know the businesses and owners for years before acquisition—we’ve partnered with them, bought from them, and sold to them. If the culture doesn’t fit, no matter how good the strategy or financials look, it won’t work.
When we integrate, we don’t take the approach of buying a broken company and restructuring it. Instead, we look for synergy and top-line growth opportunities. We often ask the prior owners to stay on for two or three years, so both sides can learn from each other and ensure a smooth transition. Meanwhile, the back-office functions—finance, IT, treasury—are integrated, and we create strong commercial cooperation.
The results speak for themselves. Our recent acquisitions of Renco, Agile Magnetics, and most recently, the Max Starlight deal, have been phenomenal. They’re performing better than we expected, which gives us confidence in the disciplined approach we’ve taken.
Standex International | Standex.com | Salem, NH