8/17/2009

After Dave Wiggins bought A-1 Millwork, a 30-year-old maker of custom woodwork for luxury homes, he called his 16 workers together “and told them I needed them more than they needed me.”

An experienced executive who has run forklift and freight companies, Wiggins, 57, wants to keep his carpenters busy crafting solid oak mantelpieces for million-dollar homes, all while he drums up new business to keep the company profitable.

Wiggins said he received loans from the state Economic Development Authority and Liberty Bell Bank in July to buy A-1 Millwork, in Waterford. He said he intends to expand beyond the housing market, and supply custom woodwork for professional offices, such as doctors and lawyers; next year, he hopes to hire two more carpenters.

“What we tend to see is new ownership that breathes new life into the business,” he said.

There are plenty of buyers in the market right now, eager to become entrepreneurs by buying an existing business, said Michael Lefkowitz, founder and managing partner of Benjamin Ross Group, a business broker in Princeton. A typical buyer was downsized from a corporation, received a generous severance package and has cash to invest in a business, he said.

A new owner will ramp up the energy level and target a 20 percent to 25 percent increase in revenue, “which is good for the employees — you have more people being hired, and employees share in the growth of the business,” Lefkowitz said.

That’s the best outcome for the acquired firm, but it doesn’t always work out that way, said Matthew Schwartz, a partner in Bederson & Co., a CPA firm in West Orange. The buyer may do the acquisition to eliminate a competitor and create synergies, “and they may take a harder look at the whole employment level,” he said.

These days, Schwartz is working with more companies in bankruptcy that are attempting a turnaround, or a sale of the company. “A lot of companies wait until it’s too late, and there’s not a lot we can do for them,” he said.

A-1 had 30 workers in the ’90s, but business declined after the founder sold the business four years ago, Wiggins said. He expects to grow the business from current revenues of $2.5 million a year, even though its products are sold almost entirely to home builders.

While housing overall is in a deep recession, the wealthy still have money to spend on their homes, Wiggins said.

For example, A-1 is making interior woodwork for a new 26,000-square-foot home in South Jersey.

Woodworker Glenn Mason spent a week making a mantelpiece, and said he must do the entire job himself. “Everyone has their own way of working, and the way I do it may not be the same as someone else.” He’s glad A-1 was sold to Wiggins: “He wants the business to thrive, and you need an owner that wants the place to succeed.”

Colin Matthews, a fourth-generation carpenter, said when Wiggins arrived, “it was a big sigh of relief. He has the right attitude — he wants to diversify, and the way to make money is to put your fingers everywhere.”

Wiggins is an amateur furniture maker whose business experience is with forklifts and freight, but he believes his management expertise is transferable.

“The basic philosophy of running the company — treating your employees right, making sure the customer is taken care of — that’s all the same stuff. Do I know everything about wood? No, but my employees, they really do. And I’m learning, because I love it.”