James Scherer is the owner and president of Austin Pallet, a leading pallet manufacturer near Austin, Texas. His company was recently acquired by Millwood, Inc., an Ohio-based pallet supplier with numerous locations in Ohio and 10 other states.
Pallet Enterprise: Why now? What makes now a good time to sell your business?
Scherer: The decision was less about the timing to sell and more about the opportunity of who to sell to. I have had several discussions with owners over the past two years who have sold, and either the impact on them or their team was not what was promised. Millwood has been a great partner and mentor to me over the past several years, and when circumstances aligned, that brought an opportunity for me to join Millwood, reduce my family’s financial risk, take care of my team, and continue to grow the Southwest market. My wife, Crystal, and I had an instant peace with the decision.
Pallet Enterprise: Why Millwood? There are some other players out there in the M&A game. Why was Millwood a good fit for you and your people? I assume you are staying on, or will you retire or go do something else?
Scherer: I have worked with Millwood for several years as a co-packer for its CORE Erosion Control product brand. I have had the opportunity to see the character of both Millwood and its ownership on display in easy and tough situations. People can tell you who they are or what they are about, but if that doesn’t align with their actions, you have your true answer.
In my time dealing with Millwood, its people have never put profit over what was right. Much like myself, they believe if you take care of your team, partners, and customers, they will take care of you. This cultural alignment was critical for my decision to sell and join Millwood. Others do seem to be players in a game that will only benefit a few at the top. Millwood and its ownership team are in this to impact lives positively and do so from a servant-leadership mentality. For me, this was key. My goal is to not only secure a good life for my family and to continue my growth, but to positively impact as many lives as I can while I am here.
Pallet Enterprise: How has the pallet business changed since you got in it? Do you think it is important to be part of a larger corporation or is there still plenty of room for smaller, independent operators?
Scherer: It has definitely consolidated and had extra pressure and benefit from disruptive forces like COVID and increased central distribution. I think the importance of being part of a larger company is probably still market and segment specific. In Texas, with the amount of growth and number of billion-dollar companies moving in, independent companies will have challenges competing in the custom pallet market. Billion-dollar companies not only want fair pricing and exceptional service, but, especially following the supply chain disruptions of COVID, want to know they have a partner who has the reach and resources to deliver every time. Smaller operators will still have a place in the market, but it will become more niche-specific and be built around the advantages they have, such as efficiency of decision-making.
Pallet Enterprise: What has been the easiest part of this process? What has been the hardest?
Scherer: The easiest part was the actual acquisition and transition of my company into Millwood. Being family-owned and operated gives Millwood a large advantage over other companies that are publicly traded or funded by investors, and that advantage shows in this process in speed, efficiency and ability to direct resources as needed.
I know you did not ask, but the most enjoyable piece has been joining a team again and having peers. As business owners, we are often on an island by ourselves. The hardest part has honestly been more emotional or mental as I adjust to my new role and learn how to function at a high level inside of a large organization again. From talking to other owners who have sold, I think we all go through this to some degree.
