One of the first steps of the marketing campaign for RPA was to aim at national associations that housed companies in Rabine’s target market – and the result was $400,000 in sales outside of Illinois the first year. Rabine self-performed one-third of the work and two-thirds was performed by between 10 and 15 pre-qualified partners, what the contractor today terms Certified Rabine Partners. Today Rabine Paving America has more than 500 CRPs to select from throughout the country.
To assure greater control over those types of jobs Rabine has a dozen project managers who fly throughout the country to supervise projects. He estimates that by year’s end Rabine will need another dozen or so project managers, some of whom will be based in cities other than Chicago.
“We come in with a project manager and the project manager handles all the details and the work with the customer.” Rabine says. “The local contractor provides the crew and the foreman but we will handle all the logistics on the job.”
Plans for Huge Growth
The next step in national outreach is an acquisition program the company has begun this year that takes the concept of self-performing locations a step further, and it’s a major component of their effort to be a $1 billion company. In addition to relying on a stable of CRPs to satisfy customers, Rabine Group is targeting 15 population-dense markets throughout the country and intends to buy successful local contractors at the rate of three a year.
To assist in the acquisitions Rabine brought in Mark Herbick, president of Herbick Advisory Group, Buffalo Grove, IL. Together Rabine and Herbick developed a profile of the ideal contractor they’d like to acquire, and a major component of the profile is an owner who wants to stick around after the acquisition.
“The market culture is different in Chicago, Atlanta, Denver, Philadelphia – wherever you aim. The original owner and his team are in touch with the local culture,” Herbick says. “In every market we want a culturally strong company that has built a reputation of trust, quality, and integrity. Our goal is to find the best of both worlds: the hands-on local, trust-driven relationship in combination with the support of a world class organization that can provide national exposure and cutting edge products and services. We want to be the local preferred company but do business with the strength of a national entity.”
He says any company acquired will become a Rabine Group company, but will often retain the original name. The acquired contractor will become a standardized company, doing things “the Rabine Way,” and Rabine will own a majority interest while the prior owner will own some part as well.
“We are looking for owners that wish to take 70-90% of their chips off the table but still want to stay on board to help grow the new business rapidly, along with their stock value, while providing new and innovative solutions for clients in their target markets.”
“The single largest reason for our growth and success to this point has been the passionate leadership in each Rabine Group company. We look for that trend to continue with each new partnership, locating owners who have a passion for what they do that can be highly successful with the support and guidance from operations, marketing, sales, and engineering from our world class industry experts.
“A lot of players in the market kind of hit a ceiling – their business grows only to the point where they can personally handle it. If they’re the right fit and we acquire them we enable them to take what they’ve developed and go forward as part of Rabine Group, capture much more market share, and become much more successful in a short period of time. We feel confident that each company we merge with will see 30-50% growth per year over a five-year span post-merger.”