Dec 27, 2021

This week we are speaking with John Mackey. John breaks down macro-economic factors that are moving in fire and life safety. We speak about Li-Ion batteries, PFAS foam, NFPA 915 and much more for technology/trends. Tune in also for insightful knowledge about mergers and acquisitions. John speaks to several of his previous roles as well as his current position and founder of the Mackey Group.

 

Transcription

Hello, all welcome to the show. I'm Gus Gagliardi, and this is fire code tech on fire code tech. We interview fire protection professionals from all different careers and backgrounds in order to provide insight and a resource for those in the field. My goal is to help you become a more informed fire protection.

Professional fire code tech has interviews with engineers and researchers, fire marshals, and insurance professionals, and highlights topics like codes and standards, engineering systems, professional development, and trending topics in the industry. So if you're someone who wants to know more about fire protection or the fascinating stories of those who are in the field, you're in the right place.

Hello, all welcome to fire code tech episode 40. In this episode, we're talking with John Mackey speaking with John, we get into some very timely topics, such as what are some of the big market factors that are moving for fire and life safety. John has a special interest in technology and where the field is going.

So I pick his brain about NFPA nine, 15, the standard for remote inspections. And we talk in depth about technology and how that's gonna change the way we. New work. John's current role at the Mackey group centers around helping companies facilitate mergers and acquisitions. We get into what does this mean for the fire and life safety space, as well as some other topics like the history around this subject tune into this episode.

If like me, you are interested in learning about some business development topics and some high level macro economics for the fire and life safety. Before we get into the episode. I just want to remind you, please subscribe. So you never miss an episode and follow us on social media. Oh. And if you want to do me a huge solid, give me a five star review on apple podcast helps out the algo rhythm and let's get into the show.

Well, hello, John. Welcome to the podcast. Welcome to fire code tech. Hey, good morning, Gus. Happy to be here. Thanks for the opportunity. Awesome. Well, I always like to get started with a bit on your background, John, would you mind telling me a little bit about. Um, your first role or so, or first couple of roles in fire and life safety and kind of how you found the field.

Yeah, no problem at all. Um, I, the very interesting path, I think, uh, and how I found myself in fire, the first half of my career was all in human resources. I'd worked in us manufacturing, uh, building materials, retail, um, I was working for Coors brewing company at the time out in Denver, Colorado at the brewery.

And, uh, got a call from a head hunter that said, Hey, we've got this great opportunity for director of HR in Marinette Wisconsin for Ansel, uh, being a Midwest guy, uh, an opportunity to get back closer to home. Uh, my wife and I, uh, explored the opportunity and. And took the leap and, uh, went to work with mark Vanover who at the time was the president of Ansel.

And, uh, I guess the rest would be history at this point because it's been a 15 year run, uh, in fire protection. Um, that opportunity, ed Ansel really exposed me to some of the, the best people in the, in the industry. Uh, some of them are still working here today. Mark Ross, Dennis Kennedy, uh, Dave Pelton, uh, and some have retired bill Smith, mark Vanover and, and many, many others.

But, uh, that really set the tone. you know, back in 2000, uh, 2006 is when that started. Um, and today, uh, I look back at that opportunity. It's just really transformational for my career and, and for, uh, you know, what I'm able to do today. So, Cool. Yeah, it's interesting. Uh, how you have a bit of a varied perspective.

Um, it seems like it's a common thread for people to kind of, uh, find their way into find life safety. But, yeah, I appreciate that little bit of exposition on, on, uh, your origin story. Um, I wanted to ask a bit more about, um, you know, some of those roles, you work for some interesting companies, and I feel like that, uh, has shaped what you're doing now.

Um, so I wonder if you would speak a little bit more about the roles you hold did or held, um, for Ansel and some of the other business develop. Kind of roles you had, uh, at, uh, Hillerin company. Um, or yeah, if you would just speak a little bit more about your career experience. Absolutely. Uh, yes, like I said, uh, the ANSO role was truly the, the gateway to, um, a really interesting career path.

You know, like I said, early on, it was all human resources. It turned out I was in the HR role. Ansel for about 18 months. And then Tyco went through a restructure and I was given the opportunity to, uh, lead a global merger. Right? So Tyco fire products, which was primarily the, uh, mechanical fittings and the sprinkler business was merging with the Ansel special hazards in the fire protection equipment business.

Um, and I was given the opportunity to lead that. I never really had a background in mergers and acquisitions. Uh, but I was the, the one person that really understood both aspects of the human resources function in Ansel, as well as the fire fire product side of things. And because I had relationships on both sides of the business, uh, Colleen LER, the president at the time thought was a great opportunity for me to, to step out of HR and lead this global merger.

And that really gave me a perspective of. Really understanding the bigger strategy for the fire business and how you build business models to support and drive that I was in that leadership role for about 18 months and traveled around the world. Really got to understand the fire market globally. And then the recession hit in 2000.

And, uh, we, uh, got through the first couple phases of the project and decided it was time to reallocate resources. So I rolled out of the merger team and into a regional sales P and L where I led the Eastern us, uh, across the integrated product portfolio. So sprint. Uh, fire extinguishers, uh, special hazards foam and even mechanical fittings.

And what I truly enjoyed about that opportunity is one really spending time with the customers and the end users of the fire products, uh, which was really, really insightful, but then being able to understand what we did in the, in the development of the strategy for the combined business. And then being able to be in a role where I was able to drive that strategy, uh, deeper into the market and did that in the field, really got to know the customers through that process.

Some of them are, are good friends of mine today. Um, and then also working with the sales team and, and a well run group of folks that you know, were really passionate about the products that they represented. And, you know, I'll say lifelong. You know, people in the fire protection space, you know, if it's special hazards folks or sprinkler sales people, um, it was really, really interesting to see what we're able to do from a sales perspective.

I left Tyco in 2012 of with an opportunity to go work for my largest customer, which was the Hiller companies, uh, down in mobile, Alabama. And I was at Hiller for about almost eight years. And while I was there, we led, um, all the M a strategy, uh, both, uh, identifying targets to help Hiller grow. And if you don't, if you're not familiar with Hiller, Hiller is the oldest fire protection contractor in the United States over a hundred years old.

Um, well rooted in the Marine fire protection space, but they were in a gross curve around commercial and industrial markets. Really going after the service space in fire protection. And they asked me to lead a number of efforts around the M and a, uh, the service operations and how we change the service model and the deployment of technology, uh, to meet customers' needs and to be able to grow the business quickly.

And then I left, I left Hiller in, uh, 2020, right before COVID, uh, to start a little consulting business, uh, where I. You know, advocate for the industry and help drive M and a, uh, into the markets. Um, either on the sell side, if you're a contractor looking to sell your business or on the buy side, if you're looking to, to acquire, um, and a number of other things, but, uh, it's been a fun couple years and helping drive some of those initiatives across the.

Wow. What a interesting time to be starting your own business last year. Um, was it just before the pandemic that you're kind of starting your own endeavor or when did that kinda happen? So I had, you know, kind of dabbled on a, you know, a little. Consulting practice on the side for a few years, just, you know, doing advising calls and, you know, just helping friends think through how to grow their business and, uh, not necessarily getting paid for it, but just, you know, being helpful.

And I feel it's important to help support each other in our industry and, um, fellows opportunity for me to kind of pay things. So I'd done that for a few years, but you know, officially turned the lights on the, on the office and hanging a shingle to say we're open for business that started in mid-February of 2020.

And as we all know, uh, the us came to a screeching halt, I think around March 13th or 14th of that year. And, uh, but I was very fortunate to have a client that was committed to what we were trying to. and, uh, we, we muscled through the first couple of months of COVID and, uh, for the pandemic. And then as we all know, the fire protection space, uh, came back, you know, full speed, you know, then to may and, uh, the rest of the summer of last year and, uh, spent a very interesting journey for sure.

Yeah. Yeah. There's a couple points you talked about in your. Your kind of background and of load to expand upon. Listen to you. A couple of the interviews at the fire protection podcast. And, uh, was really interested to hear that you had a lot of insight for just, um, the market and the, the global and the national perspective on the market factors for fire and life safety.

So, um, I think that's really interesting. I'd love to speak with you about that. It was, it was unique to get a clip of what you were thinking in the midst of the pandemic. So I'd love to hear more about. What you're thinking now that, uh, we're looking at, um, I don't know if you can call it post pandemic, but, um, this, um, more sustained, um, kind of new landscape that we're looking at, but yeah, I'd love to hear more about the, what you're seeing in the market on, uh, in a macro picture.

well, sure. Yeah. I, I think we learned, we've really learned a lot about our industry. Number one, and number two as contract owners, you know, what drove success and helped them. Get through the pandemic, especially the uncertainty of what was gonna happen on the short term. And then what we learned throughout the year.

If I remember back to that fire protection podcast that I did with drew slum, uh, we talked a lot about the role that technology was gonna play in, uh, getting through the pandemic and, and where we were coming from. And that discussion was the early adopters of technology were already in a leadership position, or at least in a better position.

To one, understand the service cycle, what inspections would due and when the best or the, you know, best in class or, uh, the, the, the better software solutions were able to, uh, really deploy their technicians remotely and allowed for a remote workforce. So you had dispatchers and schedules that were working from home technicians were weren't necessarily coming into the office.

And they were able to manage the work through the internet, you know, office, cell phones and tablets, uh, and ultimately take care of the customer, uh, through that process. And I think that, uh, you know, the companies that were able to really get up and running quickly, when I say quickly, end of April and early may, as long as they were in cities, they weren't in lockdown.

Most of those fire sheets and fire marshals said, you know, fire protection service is an essential, uh, part of our community and, uh, the work has to be done. And so those technicians and those contractors were able to go take care of that. And I think roll the clock forward to where we're at today. Um, I think that was probably the cornerstone of why the industry was, um, success.

Um, getting through the pandemic early, and then you look at last year's industry performance. Um, very strong. You talk to most of the contractors in the, in the space. And I might say space being fire, life safety as a whole. Um, everyone seems to have said they had record years and, um, that, that continues into today with regards.

The volume of work that everyone's getting done. Everyone I've talked to is talks about how immensely busy they are and, uh, with regard to upgrading new systems and staying on top of, uh, the inspection work that needs to be. Yeah. I think that technology piece is really interesting. Um, you know, I work for a company with the, this a bit more progressive as far as looking at new technologies, as it relates to the architecture, engineering, and construction industry, um, things like 3d laser scanning and, you know, uh, apps to make the business stronger.

So I thought that was a really. Good point that you brought up and one, uh, phrase that you were speaking about in your conversation with drew was, and I thought. Um, a good point as, uh, somebody with an entrepreneurial mind, but also just for businesses in general was you said, uh, easy to use, easy to buy, easy to pay, and you were describing, you know, how to get a competitive edge as a business.

I thought that was a good takeaway, but yeah, I didn't know if you had any more thoughts about that and the role of technology and business, um, kind of being adaptable. Yes. Thank you. It's. . And when you look at this concept around easy, uh, easy to use, easy to buy, easy to pay, it all speaks to the end user customer.

Right. You know, you're on the architect engineering side, I'm coming out from a contractor perspective. If you are the OEM, look how we live our personal lives, right. We're living off of our te our phones. You know, we're doing, you know, one click. You know, buying on Amazon or best buy.com or, you know, pick a website or, or an app that we're buying through.

And so now that expectation rolls over into the business to business, or, you know, the commercial side of, of service. And, or I'm not saying we're gonna sell engineered systems through one click buying on, on, on a app. But I think when you talk about a service contract or servicing your facility, we can make it pretty easy.

And so. Easy easy to use is two way one. Your customers experience has to be pretty easy to understand and how this, the workflow process or go where the work flows through the system. But it also, it has to be easy to use in the office. It can't create a significant administrative burden, uh, on the folks that are back in the office trying to manage the work.

Uh, so it has to. Practical. I'm not gonna say it's simple. but it has to be practical when you talk about easy to buy, it just has to be very simple for the customer to make a decision to buy right. I'm a big advocate advocate for just, you know, click here, boom, one button and then easy to pay, uh, look at how we're able to, to manage cash, uh, today as a consumer, you know, if it's, you know, credit cards that are already set up on a, a profile on an application or on a website.

If it's the ability to pay through Venmo and PayPal and other, you know, cash management type systems, uh, or even traditional commercial applications, like, you know, bank transfers and, um, you know, automatic handle cash handling processes. Uh, but give you, give your customer. A few, uh, options to pay. And with the more technology you can bring into that process, the less administrative tasks or responsibilities they have with regard to how to cut a check, uh, because you know, when someone's gotta write a check today, uh, think of all the steps associated with that probably takes you, you know, maybe a minute.

Whereas if it's a, you know, you know, approve the payment with one click of a button that takes seconds. And so, um, that's the concept around making it easy for sure. Yeah. That's a great point. Um, I think that you, we get so, um, you know, focused on performing the task. I think in fire and life safety in general, sometimes we don't think about keeping up with, um, some technology that has become so commonplace in, uh, other market sectors.

Uh, I think that's a great point in streamlining the process at every step and kind of, um, giving people the opportunity to, uh, not have to think so much about, um, being involved in the process. I think fire and life safety as a whole could benefit from that. Um, but, uh, I wanted to also speak with you about.

Your history in kind of the inspection, testing and maintenance, um, industry. You had some good points on your podcast with drew about just the nature. Of that kind of business, how it's a kind of churning workflow that, uh, has set intervals and, uh, a business model that is predictable. I, I never kind of, I guess that makes intuitive sense with, um, you know, what, uh, ITM and, uh, expecting fine life safety systems is, but, uh, yeah, I don't know.

I just thought that was, uh, uh, remarkable to hear. Your time, uh, being involved with, um, that market and, um, just kind of the unique business prospect that it is. Yeah. I think that when you look at the inspection test maintenance, uh, aspect of fire life safety, it truly is the core of what we do. Um, and what I mean by that is, yes, it's very important that we're installing fire alarm panels or even going further designing.

You know, uh, fire protection systems, installing those panels, installing that foam system, um, hanging those fire extinguishers or those sprinklers, but at its roots, um, it's all driven around inspection, right? As we all know, NFPA codes and standards drive to a certain rhythm, you know, weekly, monthly, quarterly semi-annual annual.

And within those codes, they also drive to a standard of what it means for that system to be compliant. And to me, that is the foundational piece of our industry because ultimately it drives safety in the communities that we live in. Uh, the places we work. And, and I think ultimately makes, uh, makes, makes for a better place, a safer places for us to, uh, to live and, and to, you know, live our lives.

So in that context, ITM creates an environment where one, we know the system's gonna be inspected. It meets a certain standard through testing and, and, um, the inspection requirements. And then when it doesn't, if it's deficient in one form or another, then it's maintained and it's. Right. There does serves a couple purposes.

One that helps maintain a safe environment for all of us. But two, I think if you're the building owner, it creates the opportunity for them to extend the life cycle of that system. Right? When that system's properly maintained within the codes and standards driven by N FPA or, you know, the international building code or the AJ, you know, they might be able to extend that sprinkler system in our 10 years.

Because they were doing, you know, proper, uh, internal inspections of that piping system to make sure that there was no corrosion or no, uh, bed, uh, micro organisms living in that pipe. Right. Um, yeah. You're able to, uh, cycle a fire pump to ensure that it's gonna meet the pressures that are required when that fire sprinkler system is asked to do its job.

Right. So. It, it really supports what we're trying to drive to the broader sense of fire and life safety and, and the importance that ITM, uh, creates. And, uh, it's a great, you know, fundamental piece of our industry. And I think that anyone is in the business side, the contractor side, um, it should be a cornerstone of how they grow their business, um, specifics of service and, you know, inspection.

Yeah, that's great. That's all great information. If you think about it, um, the installation and, you know, the modification of a system is just a very small section of the lifespan of a system that inspection testing and maintenance period of the system is much longer, uh, in the life cycle than any of those, uh, other points of the business.

So. I appreciated that, uh, bit of exposition, uh, as a transition from, or just a, a further expanding on the topic of ITM. We're speaking a little bit off air about, uh, talk that you had given on. Uh, NFPA, uh, is at nine 15, the remote inspection testing and maintenance. Um, yeah, I'd love to hear more about your thoughts on this new NFPA standard and, um, kind of the impact that you see it having on, uh, the fire and life safety industry.

Sure. Yeah. I gave a presentation on this, uh, at the fire suppression systems association, annual forum. In the, uh, spring of 2020, it happened to be the last, uh, conference that the Fs a had face to face. And the, the approach, there was one at this point, the NF, uh, NP nine, 15 committee had come together. They had met a few times and the information was now starting to come out about, you know, how this, this code was gonna be structured, where we're at today.

The code is, uh, still in. In development. And as I understand it, it's up for vote in, um, 20, 22, uh, with the expectation that they're trying to put it in place, uh, by 2023, um, a lot of moving parts and pieces right now. Um, so what I'm gonna share is, is, is to what I've learned, uh, up to the point of where we're at.

Um, obviously things can change between now and the time we get to the vote cycle. And then ultimately what's, um, implemented as part of the, the approved code, but what NFPA nine 15 does it creates an environment where we can now put internet connected devices onto fire and life safety systems to drive compliance and, uh, a level of, uh, um, insurability or a comfort that that system will operate in the event that it's needed to put out a fire or even detect a fire or some other issue.

So where it's transformational in it's original context, it says a couple things. One the local age SHA is to defi define what is remote. And the initial concepts was, you know, imagine a, a pipeline out in the middle of a, you know, You know, out in the middle of nowhere, pick a state anywhere in the United States.

And it's really hard to get technicians to that facility. Why can't we fly a drone over it with a camera and visually inspect the status of the pipeline? Same concept can be said for imagine a, a million square foot warehouse that has sprinkler heads. And those sprinkler heads are 40 feet in the air.

It's very difficult to get technicians in a man lift to go look at those sprinkler heads. Well, why can't we fly a drone? up to the, you know, the rafters to go inspect those sprinkler heads. So those concepts make a lot of sense. Well, now let's think of how we can make it a little bit easier with regard to how you inspect a, let's say a high rise building.

Why can't I put one sprinkler technician on the first floor and put pressure devices on the risers, uh, throughout the facility test, press. or check pressure versus a technician that has to go floor to floor, to floor, to floor. So does that make it a little bit more efficient to get that inspection done?

Same can be said for a fire alarm panel, I've been able to have one nice set, you know, authorized or, you know, certified technician in a facility let's say in Nevada, um, at the central office, but his technicians are out in the field. Physically, you know, running the test or watching the test through a laptop at a hospital.

Um, and you, you know, figure out ways to communicate electronically with all these IOT type. And I IOT internet of things, devices, uh, to test the equipment. So, uh, concept's great. And I think it has the opportunity to, to change the industry. Uh, what I brought up at the conference was the impact or the role that a lot of the large OEMs, the original equipment manufacturers are playing, uh, in the, in the market.

Every, every one of them, um, speak to when I say everyone of 'em Johnson controls, Siemens, uh, carrier. and a few others, Honeywell have all said that they're gonna drive towards this smart building technology. And so when I say smart building, it includes, you know, your ventilation systems, your water management systems, your electricity, um, access control, security, and there then pulling fire protection into the suite of central, uh, building manage.

right. Every manufacturer has every OEM has some concept that they're talking that they're pushing well, what nine 15 allows is for those fire systems to be plugged into these other building systems as part of the smart building concept. And once they're, you know, created, you know, electrical or electronic devices attached to these fire systems, it starts to.

Um, impact our market. And what I mean by that is that the role that a fire protection contractor today has, will change the more, um, as we get more technology adopted and into our industry, I'm not saying that's a risk. Um, but I do say that's a challenge and it's a challenge because I think the contractors that can grasp technology faster and help drive to some of those solutions.

Um, are gonna be in a better position, not any different than what we saw with the pandemic and the companies that adopted service management technology and inspection capabilities. They were in a better position to stay on top of their customer base nine 15 creates the same environment for contractors to be able to really understand.

you know, what their customer's expectations are. What does the local fire service expect with regard to remote inspection? And what's my role as a contractor to go meet that need, uh, to drive compliance in our, in our market. Yeah, well, yeah, I think it presents a lot of interesting opportunities for contractors and people all over the industry.

Um, haven't thought about some of those hard to reach places like, uh, being, uh, looked at by drones. You. The company I work for does a lot of work in, uh, aircraft hangers. You, we have these buildings that are a hundred plus feet tall, and they have 20 foot of structure, you know, in between the, you know, the, the sprinkler heads and, and, uh, where you can, you know, have to weave up with the lift.

So. I could think of a lot of different situations, uh, you know, in which, uh, remote inspection or some sort of electronic monitoring would be advantageous. Uh, one that people always complain about is duct detectors. Um, being able to locate 'em and test them is always. And, uh, it is always a pain. So I think those are some good points.

It's gonna be interesting to see how, uh, how it impacts our, our industry. I think it's a positive. I think that, um, our, our contractor base has to, um, take a, you know, recognize what's happening and in their local market, get their arms around it and, uh, do what they can to, to help solve the problem. And. Be ready to compete, uh, with the OEMs , as they're gonna try to go up as much market share as they can.

Yeah. I was thinking when you were speaking about this is, you know, how is the little guy gonna compete with the, with the JCI's of the world who are, have the ability to be a one stop shop for, uh, fully integrated building? You know, I think it's gonna be increasingly difficult for the con uh, building owner that is willing to pay the premium.

I, I conceptually I agree with that, but I do think that the opportunity for the contractor, I I'm a big advocate around, bigger in our space doesn't necessarily mean better. And what I, what the intent behind that is that the rubber meets the road in our local markets. And, you know, you can be ABC protection.

Birmingham Alabama. And you're gonna compete against, you know, the top five largest fire protection contractors in the United States, but that customer expects that local relationship to solve that local problem. And you can't necessarily do that from the corporate office in Milwaukee or the corporate office in Massachusetts.

Uh, it has to be solved right there with that customer. And I think that's the value that our contractors bring to the. . Yeah. Yeah. That's a great point. Yeah. It doesn't matter how big you your company is or how many solutions you offer. If you don't have that, uh, relationship at the community level to provide the timely response that the building owner needs to conduct their business.

So that's a great counterpoint. Um, so I wanted to speak a little bit more about, um, what you're doing now. Mergers and acquisitions and your new role at the Mackey group. Um, we kind of have a wide variety of people in the audience, so I just wanted to get like a bit more explanation on like what kind of services, uh, you offer or like the kind of business that you're, um, involved in now, since it seems.

Uh, fairly broad in my uneducated opinion. no, you're, you're, you know, gosh, you're spot on there. It is pretty broad. Um, you know, when I, when I went into this, I guess its core, um, I've always tried to position myself personally, and now my company professionally as an advocate for our industry, right. At the core of what we do, it's about, you know, creating safer environments for all of us.

And so how do we continue to advocate for that? Right. We're all passionate about in this context, fire protection, but you could be an H V a C, you could be a plumber. You know, you could be an electrician. You're very passionate about what you do. So in that, in that context, the Mac group was created to help, continue to advocate for fire and life safety.

So that said it's core. Which you see what's happening in the market today? Um, a lot of my time is spent in the mergers and acquisitions space either on the buy side of the market. So helping investors understand how the market's structured. Uh, the, uh, ups and downs are the dynamics of the market itself.

Uh, the strength of service, the strength of installation, the strength of the overall mix, where the growth opportunities are in vertical markets being, you know, healthcare or power generation or telecom or data centers or storage. Right. So helping the buyers, uh, with transactions that's number one or, or the broader strategy.

And then secondly, Helping contractors who are trying to think through their transitions, right? They're, they've been in business for 10, 15, 20, 30 years. Uh they're at a point where they need to think through, do I continue to position my business for growth or do I get it ready for sale? Um, I just wrote a podcast or excuse me, a blog a few months ago, um, should be, uh, published this month.

That talks about, uh, I wrote that was in front of mine, Dave Pelton. And we talk about. Uh, the process that these owners need to think through, um, with regard to growth or ready transition at will, we've talked to most of the contractors, we've talked to, don't know where to begin, um, with regard to getting ready to sell their business.

And so we kinda lay that out in that article and, um, some other platforms to share that information, but the Mackey group is, is intended to help both buyers and sellers through the M and a space. And then that becomes inherent with regards to then how do you. Other companies grow, cuz not everyone is, uh, buying our sell.

So people just need to grow their business. They need to raise some money. They need a strategy on how to grow it. Uh, so I've got some clients that up with that. Um, and then, like I said earlier, just to continue to advocate, uh, for the industry as a whole, you know, speaking at conferences and doing podcasts like we're doing today or, you know, simply writing, you know, for Barbara magazines for, for the blog on that.

Yeah, that's all good points. So, um, I mean, uh, besides the fairly obvious reason for wanting to sell a business for, uh, the prospect of money or a buyout, uh, What kind of reasons do companies look for mergers and, uh, you know, as far as, um, joining with another company and then acquisitions, as far as like buying up smaller companies or buying small companies for market share, I mean, what are the kind of business situations that come companies look at merger, mergers and or acquisitions.

To further explore that topic. Yeah. So let's talk about the, the merger side of it first, right? So there's obviously two sides to the coin, mergers and acquisition. So let's focus on the merger side and this goes back to my days at Tyco. Um, and then what we see happening one part of our market today. So the merger.

Generally speaking, the driver behind that is how do I become more efficient on managing my business? Right. And it has to deal with scale. And what I mean by that is size. Imagine the size when you had Ansel and you had type fire products individually, they're very strong. They owned both, you know, both paths within their market.

So the special hazard side and the position to the Ansel head or the fire equipment side and the sprinkler side for Tao fire product. but the true value of bringing emerging those two businesses together was just around scale. How do I leverage customer service? How do I manage warehousing? How do I manage, uh, dollars for R D?

How do I manage this global network of what's required? So those synergies kind of drive, you know, on the bigger side of, of those transactions. So roll that down into a contractor. Let's use my Birmingham, a Alabama example like earlier. And so let's say you're a fire protection contractor at Birmingham, and you're really good at sprinkler.

Right? Well, now I wanna go merge with my, you know, subcontractor partner that I use for all my fire protection jobs on fire alarm. Right because the two owners decide, you know, we're gonna be collectively better if we merge our two businesses and share resources, right. Let's share a building. Let's share trucks, let's share inventory.

Let's, you know, share labor. Um, because two is greater than one. So that's the merger idea and that still happens today. Um, I think it's a little bit more selective on how it happens today, but there are a number of partnerships out there across trades, fire, alarm, fire, sprinklers, special hazards, where people are working together, uh, to.

You know, solidify their position in a given market. So now let's roll over to the acquisition side, the acquisition side's a little bit different. And what I mean by that is that one it's been going out for about 20 years or so. It's been probably longer than it, but significant you can draw line back to about 20 or early two thousands and say, you know, when simple go down, Sinta started to buy a lot of companies.

So that facilitated a lot of acquisition activity. It started to consolidate the market. And what was happening was that, you know, somebody like SIM who was already big, were buying their biggest competition and some of these key vertical markets that, that, that simpel wanted to, you know, to really get their arms around the same could be said for Simas Sy customers have said, Hey, we need a fire protection solution in this market or that market.

And so said, TASS went ahead, made those acquisitions. the driver behind that is truly an investment play for their group of investors. And those two examples. Those were publicly traded companies and their stockholders had an expectation about growth, right? And in today's environment, roll it forward to where we're at.

You know, where we have been over the last five or six years now, it's a lot of private money, a lot of private equity type money coming to the table to invest in our industry. And a lot of that is one, it's an investment play. They're in it for a period of time, three years, five years, seven years. And their expectations that the profits that, you know, the industry generates or their portfolio of companies, generat then takes care of their investors, not any different than a stock, but a different type of model with regard to how they manage that.

Um, so when you look at acquisitions, I acquisitions would be specific. Revenue and profit and the growth of that, uh, portfolio a merger is more internal as I look at it. And it's internal with regards to how do I drive some synergies to make my running my business more efficient. Number one, and number two, if I merge with my, you know, counterpart my subcontractor counter counterpart in my market, I'm able to help then meet the needs of more customers.

um, which again is internal metric with regard to, I, you know, how do I run my business a little bit better? So there's value for both. I think when you look at, you know, you know, what, if I'm a, a contractor today or from an investor today, where do I play? I think there's space for, for our industry to continue to manage both.

Um, what's interesting is just the rate. That our consolidation and these transactions happen, uh, is, uh, significantly, uh, faster today than it was, you know, even three years ago. Uh, just a lot going on. Wow. Yeah, I appreciate that explanation as somebody who's more of an individual contributor, it's always seemed kind of nebulous to me.

Some of these, um, ideas around, um, you know, uh, business, you know, some of the business development topics and just, uh, larger, um, business pieces of information. So I appreciate that explanation. Spread some light on, uh, some of the histories around mergers and acquisitions in the industry. So yeah, I think that's always a good perspective to have, um, for any professional, but, um, yeah, I wanted to speak with you about this, um, idea.

You talk withdrew a little bit on the podcast. It. A problem that I've heard brought up, um, more than a couple times in the last year, which is, uh, the need for, uh, people to join the workforce and fire and life safety, or this kind of churning need for people to join the industry. And, uh, how you were talking about the low visibility of fire and life safety being a problem because, um, we're kind of last on the list for.

New people who are, you know, technician or kind of across the board to have the opportunity to enter the space since there's already, um, low volume of people coming into the workforce for some of these, uh, technical roles. But I thought that was a great point and I keep hearing it, uh, with everybody I talk to about the need to, um, increase visibility and to.

Bring people into the craft because of the, the, like you've been speaking to the, the work increase. Um, yeah. So, yeah, it's, it's, it's a great challenge for us. Uh, when I was go back, you know, 15 years ago when I was at, at Ansel, given presentations to the senior leadership at Tyco about the challenges that we're facing as our baby boomer employees, uh, were getting ready to.

So now we're, you know, we're actually past the peak of that on the back side of it. So now our workforce is starting to feel that. And what I've learned over the last 15 years is, you know, you know, one, you really have to take care of your employees. We have, right? So competitive pay and benefits, truly committed to training and develop.

Um, and it's twofold. One, what does the company company need to train that employee around and how do we develop that employee to meet the needs of the company? But I think more importantly it's as a company, do we truly understand what the employee wants to do with their career? I've been very fortunate to go from human resources to M and a to sales and business development.

You know, now to, to run my service operations and technology, I've won a lot of different hats over, you know, a 25 year career number of different industries. Right? I've been fortunate enough to work out the number of leaders that were open, willing to support me and open doors for me to do. But as, as you know, business owners today, as you look at your employees, are you creating pathways or at least opening doors for, for people to develop in the areas that they choose.

Right. And so, you know, somebody who wants to go pursue, let's say they're a fire sprinkler technician, or maybe they're a designer, but maybe they wanna go pursue a fire protection engineering degree or a four year degree in fire science. Their pathway at the end of the day may not be a full time job with you, right?

Because now you're gonna help them go get certified to become a, a firefighter in your community. Right. That's part of the process and I'd, I'd rather be part of a company that helps nurture and grow people to do what they, they choose for the career, the profession, uh, because I think that feeds upon itself.

You open doors for, for more people that more people than I gonna be attracted to your, your company. versus just somebody. Who's just kind of one way. Well, I'm gonna, you know, develop you for that. Nice set three, but I don't want you to become a nice set four cause I need to take away someone else's job.

That's shortsighted. I think we need to look at the bigger picture. Um, so, um, that's one, as you look at the contractor space and how we have to become more committed to training development of our people. I also see an opportunity across the industry for the large manufacturers number. And the large professional associations to come up with a, a common solution or at least, or let's say common, I say a structure to how we attract and train people come into the space, right?

Pick any OEM, you know, um, Ansel's better served when they're out there supporting and sponsoring training programs dedicated. Restaurant service technicians or fire extinguisher technicians, Amex would be the same, right. Um, Viking would be better served. Viking. Sprinkler would be better served when they're supporting apprenticeship programs and training for sprinkler technicians, um, or maybe valve repair technicians or whatever it might be within the local market.

Uh, because the, now you're able to get talent earlier. You know, most of these trades are recruiting from high schools through job sharing through, um, co-op type programs, you know? So from a fire protection perspective, how do we get these young people into the shop to shadow or technicians to be exposed to either statewide or, you know, local education programs.

So they can really learn, uh, the industry. Uh, and start to go down a path, uh, that will keep 'em in the space for a long time. Yeah. I like that your point that you made about, you know, um, taking care of existing employees and also looking at. You know, how do we provide incentives for people to get into the industry?

I like, I like the idea of professional organizations taking a vested interest in, um, giving back to the community and, and, um, providing ways to make it easy for people to get involved. I think that's a great idea. Um, yeah, I wanted, so to round out the interview at the end, I know we've talked about a lot of, um, large market factors, but, um, yeah, I just think, uh, even maybe more broadly in general in business, um, what kind of trends do you see going forward?

We've we touched a lot on, um, technology and adaptability and. And, um, kind of, uh, some of these topics that are been hot and heavy in the, in the industry right now, but, um, yeah. Do you see any markets that are, uh, it seems like a lot of different markets are experiencing a boon right now, but do you see any specific markets, uh, experiencing a boon?

Have you, um, had any experience with any of these, uh, Any of how fire and life safety touches like cryptocurrency or anything like that? Uh, not necessarily on the traditional cryptocurrency side. Right? So when you look at what's the influence that fire life safety's gonna have on that market, um, where fire and life safety's gonna fit.

Is, um, in the server farms and, uh, the infrastructure required for cryptocurrency, right? These essentially are large, very large, very complex data centers. Right. And they need fire protection. There's a lot of redundancies. I understand that and how they're structured. Right. But if even if you're 12,000, 20,000 square foot facility full of servers, you have generators, you have different types of airflow.

All right. How are we gonna protect? Those banks of servers, not any different that we do with a, a data center today, but it just adds another level of complexity with how you protect that space. Right? So, um, so let's use that from a broader perspective. So it's telecommunications and data centers. I think those are always evolving, right?

Every major data companies continue to evolve how their data centers are built, how they're managed. Um, how big or small they are and where the levels of security come into play. Uh, you can say the same for telecom right now. We're on 5g, but we know that as soon as 5g is implemented, six G's coming right behind it.

Right. So that infrastructure continues to change, right? So you have a fire protection need in that space. I think the other big issue is energy storage, right? So we have a, you know, Regional markets across the United States. We've got power. Our, our power grid generates excess power. They're using, um, energy storage systems.

So lithium eye, anti battery packs, and battery systems to collect that excess power. So one, how do you store it? How do you manage that safely? Because as we all know, if you've ever seen a lithium eye on fire in a Tesla, Uh, thermal runway is a significant issue. Um, and there doesn't seem to be a really strong solution to put those out.

So now it's thermal management. And how do you control temperature of those battery packs so that they do not get to thermal runway? Um, so I think that energy storage is gonna be a significant challenge for our industry for the next 10 years, 10, 15 years, and then roll into that then feeds into power gen and what we do with generators.

Uh, And how we control power. I also see opportunities in, um, firefighting foam. You made to reference to that earlier, and the pressure that we have around PFOS and PFOS and the foam space, um, and that also rolls into. Fuel storage and large refineries and chemical plants and, uh, oil and gas networks. So what are we gonna be doing around firefighting foam and making sure that we put our good, um, fire protection agents that are no one, put the fires out and create a safe environment for us, but two do not have a negative impact on our.

So it's a delicate balance, but I think the foam landscape is gonna change. We already see, you know, the, uh, HFCs and the, uh, refrigerant type gases that are used in fire protection are under pressure right now with regard to how that supply chain's gonna change. Um, so I think that's gonna be interesting to see, you know, across the market.

So data centers, energy storage, which is power gen. And then how do we manage agents across firefighting foam? Um, HFC type gases, um, have the potential to, you know, change how we, how. You know, manage fire protection over the next 20 years. Yeah. I'm glad you brought up the change in foam. I had a, I was in the back of my head.

I was thinking, man, I wonder with your experience with Ansel, if you're still keeping a thumb on the huge changes that have been happening in that market, uh, it's been really, really interesting for me to, to take a look at what the military has been doing. Just the, the shift away from foam in general. So, um, that's a, I see that as a big market mover as well, but, um, yeah.

Anyways, John, um, thank you so much for coming on the podcast. Where can people find out more about you if they want to connect? So, um, first pace, first place will be my website Mackey group, LLC dot. Um, kinda gives you some perspective of what the, what we're all about. Um, I'm on LinkedIn, um, just typing John Mackey.

There's a few of 'em. Um, I am not the CEO of whole foods or retired CEO of whole foods. uh, but, uh, you'll find me there. Um, and then, uh, all my contact information, both on LinkedIn as well as my website is, uh, all up to date and it's probably the best. Uh, to track me down, I will be at, uh, usually any one of our conferences.

Uh, the first one coming up in February is the fire suppression systems association, uh, in Fort Myers, Florida, I'll be there. And then each of the Ettes, um, national association for fire equipment distributors in March, April, may, and then I'll be at NFPA, uh, in June in Boston. So, um, we are in a relationships industry.

I make a point of, uh, getting to each of our conferences. Shake hands and, and, uh, support people wherever I can meet people and, uh, just share perspectives on the industry. And, um, you know, we do that face to face. Uh, we've learned how to do it through video calls and everything else, but, uh, the end of the day, it's, uh, so much better to do it in person.

Yeah. Awesome. Well, thank you again, John. And, uh, yeah, it's been a good one. Thanks, GU. Thanks for the time. And, uh, be. Thanks for listening. Everybody. Be sure to share the episode with a friend, if you enjoyed it, don't forget that fire protection and life safety is serious business. The views and opinions expressed on this podcast are by no means a professional consultation or a codes and standards interpretation.

Be sure to contact a licensed professional. If you are getting involved with fire protection and or life safety. Thanks again. And we'll see you next time.