What’s the secret ingredient to the long-term success of Rohnert Park, California-based PACE Supply?
If you ask PACE Supply Board of Directors Chairman Ted Green, who late last year turned over the company presidency that he held since its founding in 1994 to Ron Bohannon, he’ll tell you the answer is quite obvious.
“People are the lifeblood of any company,” he says. “We look for aggressive individuals who want an opportunity to grow within our organization. Our people truly love this industry and strive to be successful with whatever responsibilities they are given. Our organic growth is directly related to the quality of the people working here at PACE Supply. As we add branches and divisions, they are eager to take on the challenge to be a part of that growth opportunity.”
And it’s been quite a growth trajectory for PACE Supply since Green started the Northern California-based PHCP-PVF distributor in 1994. Green notes that prior to 1994, the company existed as the plumbing division of Bell Industries. Bell was an electronics distributor out of Los Angeles that expanded and purchased many companies in many different fields. Green was running the plumbing division for Bell and worked with a lawyer and accountant to put an ESOP (employee stock-option program) together so the employees could buy the division from Bell, which happened in 1994. At the time there were four branches and nearly 60 employees.
Today, through a combination of acquisitions and organic growth, PACE (which stands for Plumbers and Contractors Emporium) boasts more than 20 wholesale locations and four Premier Bath & Kitchen showrooms in California and Hawaii with a workforce of more than 1,000. PACE Supply remains an ESOP company.
All the pieces coming together
Green feels PACE Supply, a member of the AD buying group and active in ASA, thrives in a competitive marketplace because of its multi-divisional mindset. “Within all our branches we will supply product to contractors for plumbing, PVF, hydronics, water well, filtration, septic, fire sprinkler, water works and seismic pipe supports,” he explains. “We have trained sales staff for all these divisions within the company and will move product to the customer through any of the existing branches. Most importantly, within all these divisions the mindset is the same. Take care of the customers, whatever their needs are.”
Green notes PACE Supply isn’t afraid to pull the trigger on expansion whether it be opening a new branch from the ground up, or acquiring an existing company. “When the opportunity arises that fits into our growth strategy, we will seriously consider an acquisition if the company fits comfortably into our overall game plan,” he says. “We have learned the hard way that assimilation is easy to talk about, but difficult to succeed at from the new-employee point of view. Our size and type-A mentality can be overwhelming for people who come on board from an acquisition standpoint.”
To that point, PACE Supply had been doing business in Hawaii for years before acquiring Seattle-based Pacific Plumbing Supply’s Hawaii operations in 2016.
“For many years we have been providing inventory to the largest mechanical contractor on the islands,” Green says. “We would ship to them in containers on a weekly basis. This multi-year experience opened our eyes to the opportunity to have branches in Hawaii. When the opportunity made itself available for us to purchase a company in Hawaii we took it.
“Since the acquisition, we have moved many mainland employees over to the islands and have completely redeveloped the inventory stocked there and expanded the branches physically. Our biggest challenge was creating software to help us get inventory to the island when they need it from our DC. We have very high expectations of growth in Hawaii in the future.”
PACE Supply also has its eye squarely on the ever-evolving e-commerce environment. “We are actively working on an e-commerce website that hopefully will be active soon,” Green explains. “Our customers are asking for it and we have heavily invested in programming and people to provide a first-class experience online.”
Looking back and ahead
Green’s efforts throughout the years have not gone unnoticed by those in the industry. “Ted Green is one of the smartest individuals I have ever met in this industry,” AD U.S/Canada PHCP Divisions President Jeffrey Beall says. “He is quiet and soft-spoken, but is always forward-thinking. During our member business meetings, we always enjoy the ‘Ted Talks’ as we call them, always making you think about the next big thing. His passion for the independent distributor served AD well in his leadership capacity as chairman of our plumbing division. Ted has led PACE Supply to new levels of achievement and continued to make them an industry example of success. One of the highest compliments I heard recently about Ted came from another distributor leader who shared with me, ‘Ted Green is the kind of guy I would like to work for. I really admire him and how he runs his business.’”
ASA CEO Mike Adelizzi has equally strong words of praise for Green. “Not everyone can build a long career and look back at their retirement and see that they mattered,” he says. “Ted Green and the PACE team are true industry visionaries and great industry stewards, supporting the regional association, the nation association and their buying group. It’s easy to give money to something, but it’s a totally different matter when you commit your time for the good of an industry to help everyone, including your competitors. Ted’s leadership will be missed.”
Green again turns back to PACE Supply employees when reflecting on his career. “I’m most proud of having the opportunity to work alongside such professional co-workers,” he says. “And being able to provide them opportunities to grow and succeed. PACE Supply has a great reputation in the industry and the communities that we exist in. My pride in that is due to the many affiliates at PACE Supply that make that reputation so positive.
I often have said businesses are not good or bad, they are what they are based on the people. What I am going to miss most when I step away from the day-to-day is the interaction with so many great people here.”
Green says people tell him how amazed they are at the size of PACE Supply. “As if size is the all-encompassing factor to success,” he says. “I value relationships more than growth. I love that during my time here at PACE Supply. I have been able to help people become successful in their own right. That has given us the ability to choose to successfully grow in a profitable manner.”
Now, PACE Supply is under the direction of industry veteran Bohannon with more success and growth on the company menu. “Ron worked for two national wholesalers that grew to be multi-billion-dollar companies,” Green says. “Those experiences will help him lead our team as we continue to grow. Ron loves the industry and loves working side by side with fellow team members. His experiences with the other companies will help him review and challenge our status quo as we move forward.”
As for the future? PACE Supply recently opened in Fresno, California, and continues to seek strategic expansion and acquisition opportunities. “We have been growing at a double-digit rate for multiple years now,” he says. “Our growth has stretched our internal operations and we are looking to improve processes and procedures. Along with that has come a major investment in employee training to help our employees operate effectively for our customers. In the past couple years and continuing for the next few years we have many long-term employees retiring and we are working on those succession plans.
Long-term, we will continue to look for opportunities to grow, whether adding divisions, opening new branches or acquisition. Our game plan with growth always is about synergy with the current operations and that it is profitable growth that puts money to the bottom line for our employees.”