Buying a company and incorporating its employees, customers, assets and culture into one’s own is harder than it seems.
SMA, an agricultural parts distributor in Jonesboro and No. 74 on the list of largest private companies in Arkansas, found that out after buying Blount International’s Tisco in early 2017. SMA General Manager Blant Hurt said the acquisition, the largest in SMA’s history, forced the family company to upgrade its operational systems such as customer and warehouse services.
“Honestly, we are a better company [because] it put a lot more pressure on the company,” Hurt said. “In doing so, it forced us to build some muscle, some organizational muscle to carry through that. The first couple of years it was pretty ugly. In the end it forced us to get better. That set a good foundation for us the past couple of years.”
The past couple of years, of course, were an economic whirlwind for everyone when the COVID-19 pandemic surged through the country beginning in March 2020. SMA had the advantage of having its business model tied to the agriculture industry, which held steady since people still need to grow crops and eat even during a pandemic.
SMA had revenue of $100 million in 2021, an increase of 5% from its 2020 revenue of $95 million. It has five distribution centers across the country; in addition to Jonesboro, it has facilities in Strongsville, Ohio; Des Moines, Iowa; Corsicana, Texas; and Fresno, California.
“We had a good year in 2021,” Hurt said. “It was our best year we ever had just in terms of top-line, bottom line. I think the ag economy at our level is almost a bit insulated. There are trends that are favorable for ag.
“You have the constraint of supply situation and you have elevated demand. You have crop prices that are good. The Ukrainian situation is going to put more pressure on food prices. It will be interesting to see how that plays out as we go into the fall and winter.”
The addition of Tisco greatly expanded the company’s product and customer bases. SMA now offers more than 30,000 agricultural products, more than double what it did before the acquisition.
“We took on some talent from the company we hired,” Hurt said. “They had some good people and some good products and some good customers.”
The company was founded by Bill Hurt Sr. and Bill Hurt Jr. in 1964. Blant Hurt’s cousin, Rodger, is the company president. The company has about 140 employees, of whom 80 are in Arkansas.
Blant Hurt said good results have carried over so far in 2022, although the company hierarchy is keeping an eye out for the warning signs that the economy may roughen. Hurt said SMA depends on the supply chain distribution so the continued kinks in the supply chain are a worry, as are wage pressures.
SMA sells to retailers, not directly to farmers, but there is a “cascading ripple effect” on SMA’s operations from any future farm struggles.
One thing SMA did, Hurt said, was decide a couple of years ago to stockpile merchandise. That paid dividends amid supply chain disruptions that caused headaches for other retailers nationwide.
“The supply chain has been a challenge, but we have managed to navigate our way through that,” Hurt said. “Things are better than they were a year ago for sure. We have taken a little more inventory than we normally would, just consciously and purposely. We are a little easier because we are not selling trendy items or perishable goods. It is easier for us than it is for a Target or Walmart, for example, to swell their inventory.
“It looks good now. We’ll see if the economy slows, like it looks like it might, if all the geniuses who did that look good in six months.”
Hurt said SMA is seeking continued growth, not necessarily through new markets or acquisitions. He said the company is relatively new to the Midwest and he believes that there are new or existing customers that SMA can win over through service quality.
“We expect to grow this year,” Hurt said. “I think we are in a position to take some business from some competitors, maybe execute better and have the inventory and be able to deliver where others may have stumbled.
“We are having a good year so far. We are alert for signals that things may not continue so well, but all in all in our space, the ag economy is good.”