ASC and Sunstone: The Art of the Zipper Merge

Estimated reading time: 6 minutes

We’ve all been there when two traffic lanes need to merge into one: Chaos ensues. It’s most often because some folks simply choose not to cooperate with fellow drivers. But when the so-called zipper merge works correctly, traffic flows smoothly. The same can happen when bringing two separate companies together; for some pairings, it’s a battle, while for others, the merging is as smooth as a zipper.

American Standard Circuits and Sunstone Circuits have been integrating their business merger for about six months, and we checked in with Anaya Vardya and Matt Stevenson to see how the integration is proceeding. There are simple lessons to be learned from hearing their stories and applying them to your own situation.

Nolan Johnson: Anaya and Matt, you’re six months into the merger process between ASC and Sunstone. How's it going?

Anaya Vardya: From my perspective, I couldn't be more pleased. The teams have integrated very well. The marketing teams are working coherently to present a good face to the marketplace. Our customer service teams at both locations are working together, so that we're able to move work between our two organizations in ways that make the most sense. We’ve also been working on some things to increase the technology at Sunstone. I’m very pleased with how well the two teams have put all egos aside and focused on the overall objective of our organizations.

Matt Stevenson: We see mergers happen in the industry all the time, and they don't always go very smoothly. Ours has gone well. We're putting together a great teamwork message behind the scenes and in front of the customers to take advantage of the synergy between our two companies.

Johnson: When this merger was announced, you mentioned complementary capabilities between the two companies. What synergies were you expecting?

Stevenson: We knew we had two different approaches to marketing and sales. Sunstone has been highly online and digital. American Standard has been more direct with salespeople and at trade shows. So, when we planned to put those together, we knew it would be a powerful tool. I don't think we realized how powerful it would be until we started doing it.

Johnson: Can you give me some examples of how that collaboration works?

Stevenson: Getting the Sunstone business model into the hands of American Standard’s salespeople gives them something entirely new to sell, in addition to high quality and technologies. Now they have options for prototypes, smaller quantities, and quicker lead times. They have assembly options integrated into the process. The salespeople have more breadth and more of the supply chain available to sell to their prospective customers.

Vardya: When putting two businesses together, you must figure out how one plus one equals three. We had several cost synergies we knew we could take advantage of, and those opportunities were implemented quickly. We knew all along that our biggest synergy was revenue related—the cross-selling opportunity. I estimated how much revenue I thought we would see with Sunstone in the first year, and barely six months in, we're already past my predictions for the whole year.

The good news is it's much better than I anticipated. It’s a testimony to how the two teams work together. They figured out how to do those quick-turns in a timely fashion—which is critical—and have been able to integrate the Sunstone sales team with ASC manufacturing teams, so they can know what the status of their orders are all through production.

There will always be a few hiccups here and there, and there are some things we need to learn and do better, but we’ve clearly exceeded expectations at this point.

Johnson: Both of you are savvy businessmen. Meeting your annual goal in six months isn't because you underestimated revenue. That sort of performance implies strong acceptance from the customers.

Stevenson: The message is working. Our tagline is, “The ultimate PCB solution,” and it's true. We’re cradle to grave, from prototype to full volume production, as well as American Standard’s global sourcing. Include design tools and quick-turn assembly options and it really is the ultimate PCB solution. Our existing customers see it and new customers see it.

At Sunstone, we used to have a set of parameters that were automatic “no bids,” because we didn't have a partner to satisfy these needs. No bids are no more. Almost anything that a customer wants, we can quote, and we can be competitive, particularly in terms of lead time, pricing, and technology. That message is working. Kelly Atay and her marketing team have done a great job getting the message out. It's starting to gain traction.

Johnson: How has this merger changed activity on the manufacturing floor?

Stevenson: At Sunstone, not much has changed. We have a couple of pieces of new equipment planned or in process. That will help us build up some capacity and other capabilities. We've got a few projects launched to build up some of our technology skill set, to understand what we're capable of today, and what we would need to ramp up our capabilities. We hold onto that clear vision of where we want to be. That's really the exciting part of the manufacturing floor.

Johnson: Obviously, the revenue numbers tell a compelling story, but what are your customers saying?

Stevenson: It's been positive. We've had almost 100 orders moved from a Sunstone customer to ASC or vice versa. We're not even six months into this yet. It's just getting more positive over time. The product quality has been great, and the responsiveness and the collaboration in the design teams at ASC have given Sunstone a lot more to offer our customers. We’re taking the initiative to talk to as many customers as we can, to update them on what we're capable of now. Customers are very interested in learning more, and in updating their technology roadmap now based on where technology's going. It’s been really positive.

Johnson:  Anaya, what do you look forward to in 2024?

Vardya: We anticipate growing significantly from our combined 2023 numbers into 2024. We have a lot to offer in terms of being able to help customers. The fact that we have design software available, the ability to do assembly on prototypes, and the wide breadth of technology offerings at American Standard Circuits, means combining them will make it a powerful year.

Some of our newer customers are choosing us because we’ve got the assembly offering via the Screaming Circuits partnership, which Sunstone has enjoyed for many years. I expect huge growth going into next year.

Johnson: Which seems to be the most effective channel for getting a new customer: Sunstone or ASC?

Vardya: Sunstone has historically had a much higher new customer rate, and that's primarily because Sunstone customers are typically placing smaller quick-turn orders. I expect that we will get the bulk of our new customers through Sunstone channels. In the meantime, we'll have our sales team work with some of those accounts to build long-term working relationships. Building relationships will be a key initiative in 2024.

Johnson: Congratulations on a successful merger, so far.

Vardya: Thank you, Nolan.