Buying Competitor Expands Turning's Market Share
YOUNGSTOWN, Ohio -- Turning Technologies’ acquisition of its key competitor will give the company control of about half its market, nearly double Turning’s size and bring the newly acquired company’s warehouse jobs to the Mahoning Valley, Turning’s CEO said.
Just hours after closing the deal -- its terms were not disclosed -- Turning’s CEO. Mike Broderick, announced Tuesday that Turning has acquired its Scottsdale, Ariz.-based competitor, eInstruction.
“We don’t know what the future holds except we’ll be positioned very well,” Broderick remarked. “With our core markets and response systems together, we have in the ballpark of slightly better than 50% of market share, which basically means that combined we will sell more of our type of devices than the rest of the competition combined.”
Broderick told reporters at a news conference that Turning has spent the past six months evaluating the purchase. eInstruction was Turning’s largest competitor, he said, and it had been looking to solicit capital.
Turning’s ownership, including senior management and Florida-based Brockway Moran & Partners, which three years ago purchased a “substantial part” of Turning, provided funds for the purchase, Broderick said. “They’ve been available to assist with capital where needed,” he said of Brockway's ownership interest.
Turning, which develops and sells audience response technology for educational institutions and businesses, is the largest provider in the college and adult education segment, while eInstruction has been the leader in K-12 education globally, according to Broderick.
“There are lots of synergies between the organizations. They are competitors of ours in that they sell response technology as we do and assessment systems used in education, but they have a much broader array of products,” Broderick said. Those products include electronic whiteboards, document cameras that can be used in the classroom to display images, and a handheld mobile electronic whiteboard that can be used to control presentations from anywhere in the room.
One product of particular interest ieInstruction introduced a year ago is Insight 360, which utilizes tablets and mobile devices for engagement and assessment in the classroom, Broderick noted.
“Turning has always been the market leader in the higher education segment and corporate learning segment,” and second in K-12 to eInstruction, Broderick said. “So with this acquisition we will be the market leader in virtually every level from kindergarten through adult education,” he remarked.
“Classroom penetration of our type of technology is still around 1% so you can see there is an enormous runway ahead of us,” he added.
Mahoning Valley business leaders, including Turning’s landlord, hailed the announcement.
Jim Cossler, CEO and chief evangelist of the Youngstown Business Incubator, which owns the Taft Technology Center where Turning is based, reflected on when Broderick first contacted him 12 years ago with the idea for the company.
“When we first got together in 2001, to be frank, we weren’t really sure -- either one of us -- what we were doing. We certainly weren’t the 11th best incubator in the world in 2001 and they weren’t the largest company in their space in 2001 and we kind of grew up together,” he reflected. “We made some mistakes growing up but we learned from those mistakes.”
Turning's acquisition announcement is “huge” because of fears that if YBI grew a “monster company” like Turning someone would acquire and relocate it. “Now Turning just bought somebody and is moving them to Youngstown,” Cossler remarked. “It’s really great validation."
“It’s good news for the company and good news for the community,” affirmed Tom Humphries, president and CEO of the Youngstown/Warren Regional Chamber.
The acquisition adds 130 to Turning’s workforce, including 100 permanent employees and another 30 who will stay on temporarily until they are replaced. It brings Turning's total employment to nearly 300 full-time employees, plus about 50 part-time employees, Broderick said. While many employees will stay where they are, positions in finance, sales support and operational support will be brought to Youngstown, and a combined warehouse and distribution center will be developed in the Youngstown area. The lease for eInstruction’s current warehouse in Texas expires next month.
The acquisition will also expand Turning ‘s reach geographically, giving it operations in Kentucky and in Paris.
“In many countries we’re strong and they’re not, and in many countries they’re strong in we’re not,” Broderick said. In particular, eInstruction has a “large base and presence” in France, Russia, India and Indonesia, he said. International business will represent about 20% of Turning’s overall revenue with the acquisition.
Separately, Turning announced that it recently opened an office in Belfast that will serve most of its United Kingdom. The office will join Turning's existing office in the Netherlands and eInstruction's Paris office.
MORE:
Aug. 7, 2013: Turning Technolgies Acquires eInstruction
Copyright 2013 The Business Journal, Youngstown, Ohio.
CLICK HERE to subscribe to our free daily email headlines and to our twice-monthly print edition.