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MEDIA - PRESS COVERAGE |
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Green Bay nonprofit makes a connection with area staffing agency
SOURCE: GREEN BAY PRESS GAZETTE May 15, 2007
Acquisition by Integrated Community Services has benefited both organizations
Social entrepreneurship—it’s and idea that’s gaining popularity in the nonprofit arena.
At Integrated Community Services (ICS), a nonprofit in Green Bay, the lion’s share of funding comes from government resources. ICS assists with rental payments, heating bills, homeownership, and helps its clients become self-sufficient.
But while the organization aims to build client self-sufficiency, it’s working to improve its own as well.
For years, ICS has operated a profitable property management division, providing snow removal, lawn cares, cleaning, and maintenance services to condo associations, multi-resident properties, and commercial clients.
In July of 2006, the organization took its income-earning business model one step further, acquiring Personnel Connection, a Green Bay staffing agency.
“ICS had been looking for an opportunity to diversify itself,” said Jon Syndergaard, CEO. “The government funding streams are fairly fickle.”
Syndergaard said the search took over a year, and the organization considered all manner of businesses from real estate development to franchises. Then, a connection at Cornerstone Business Services, a Green Bay0based mergers and acquisitions firm, suggested they take a look at Personnel Connection.
“Initially we questioned whether or not the staffing business really did meet our vision and goals, but the more we talked about it the more it seemed to make sense,” said Syndergaard. “As we have tried to move people to self-sufficiency, the one piece that has always eluded us was the opportunity to put people to work.”
Personnel Connection was founded in 1988 and continually managed by Mark Gigot. Although its primary emphasis is on light industrial work, the firm also places people in the clerical and semi-skilled positions.
Syndergaard admits there will be some crossover with services provided by the Job Center, an agency sponsored by the Wisconsin Department of Workforce Development, but Gigot was quick to point out key differences.
“One of the big differences is that we’re going to hit a market of people that need work right now,” he said.
Gigot said Personnel Connection can put people to work within a few days after processing an application. For some workers, that means showing up at 6a.m. and taking whatever daily assignment comes up. For others, it can mean longer, more traditional temporary assignments.
“When people come to our office, they are obviously looking for long-term work, but also that day. They have bills to pay and need work quickly.” He said. “Obviously our goals are similar to the Job Center; we might just get there a little different way.”
Personnel Connection issued 1,800 W2s last year. Ten months since the acquisition, Gigot said growth had exceeded expectations. The business remains on Monroe Street, just blocks from ICS offices, and all six core staff were retained, including Gigot.
“I’m locked in for three to five years,” he said. “I’m locking in because I want to stay, because I like what the acquisition is developing into.”
After nearly 20 years of ownership, Gigot was looking to sell so he could free us capital to pursue other goals. He was interested in remaining with the business and expected the buyer would be an out-of –state firm looking to acquire a new market.
When Cornerstone presented him with a nonprofit as a potential buyer, Gigot said he was more surprised by the buyer’s location than its organizational structure.
The concept didn’t seem too radical to the board at ICS either. While the more common model of social entrepreneurship is for a charity to grow a business from within—as ICS did with its property management division—the idea of a nonprofit acquiring a for-profit business is not unheard of, particularly in other parts of the country, Syndergaard said.
“We have a board that is very dynamic, contemporary, and business minded. The senior leadership and the board have spent a lot of time practicing out-of-the-box forward thinking,” he said. “They were really open to this idea.”
Syndergaard said that based on the sale of some assets, ICS had good liquidity to finance the deal. He also gave credit to Nicolet Bank for being an “outstanding partner” and to Gigot as well.
“The recognition was that really it was the right thing to do for the community,” Syndergaard said. “People were focused on the inherent value as much as the business value.”
Gigot declined to share whether he had provided any seller financing for the acquisition saying instead, “I’ve got some interest in further development of the merger.”
He sees an obvious synergy between the organizations.
“They’ve got a new talent pool for us that we can bring to our clients,” he said. “That has obvious benefits.”
Syndergaard sees another advantage in leveraging the nonprofit mission on ICS. Businesses are showing a keen interest in working with organizations that provide local returns.
“I think that’s a unique story that we have to tell and that will resonate with people in the community,” he said.
In fact, Syndergaard and the ICS board are so enamored with the arrangement they’re looking for additional opportunities.
“We like this model and we think it makes sense,” he said. “We think there’s other opportunities to take it on the road.”
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