Before growing Armor Holdings Inc. into a major international defense contractor, Jonathan Spiller had to take the company, then known as American Body Armor & Equipment Inc., through a Chapter 11 bankruptcy.
Although it was difficult, Spiller looks on that Chapter 11 process two decades ago as a worthwhile experience.
"Every CEO who runs a business should have a spell in bankruptcy," he said. "It teaches you an incredible discipline."
Spiller was speaking Thursday at the CEO Nexus Forum presented by the JAX Chamber's GrowJAX initiative, a program that seeks to nurture established second-stage businesses in the Jacksonville area.
Spiller was brought to the forum to share the lessons he learned in building Armor Holdings. A CEO that can grow a business from $8 million in revenue to $600 million is doing something well, said Don Capener, dean of the Davis College of Business at Jacksonville University, which hosted the event.
"That's exactly what Mr. Spiller was able to accomplish," Capener said.
Spiller was brought in to run American Body Armor & Equipment in 1991, a year before it went into Chapter 11. After emerging from bankruptcy, the company, renamed Armor Holdings, grew to $600 million in annual revenue before Spiller left in 2003.
The Jacksonville-based company eventually was sold to BAE Systems PLC in 2007 for $4.5 billion.
Spiller said the most important lesson he learned while his company was in bankruptcy was that he had to make it profitable before he could think about growing.
"No matter what you do, you've got to make money," he said. "At the end of the day, nothing else really matters."
Armor Holdings grew from a relatively small company that mainly made bulletproof vests to a large diversified manufacturer of defense products mainly through acquisitions. Spiller said the company made 42 deals while he was CEO.
"If you want to grow quickly, acquisitions are the way to go," he said, also saying "being acquired is sometimes the best way to grow."
However, you need to be cautious in bidding for other businesses, he said.
"Never overspend, no matter how much you want it," he said.
Armor Holdings mainly used its stock to finance its acquisitions strategy, issuing shares of the company to businesses it bought. Spiller said businesses have several options for financing a growth strategy, such as debt or investments from venture capital firms.
"We didn't have a lot of choice in what we were going to do," he said. Since American Body Armor was already a publicly traded company even when it was small, it used its stock.
"We decided we were going to use our currency — our equity — to grow the business," he said.
Other tips offered by Spiller included the importance of hiring the right personnel for your business.
"Hire the best that you can," he said.
"If you make a mistake, fix it immediately."
Spiller is a native of Great Britain who has lived in the U.S. for 36 years. He currently works as a business consultant and real estate investor and also owns the Beaches at Vilano restaurant in Vilano Beach.
He is an accountant by trade and never expected to be an entrepreneur.
"It was basically through complete serendipity," he said.
Spiller was working for accounting firm Deloitte & Touche in New York but he had visited Jacksonville to do some work with engineering firm Reynolds, Smith & Hills, and he grew to like the area.
"A year later I was asked to come down and be the president of American Body Armor," he said.
With his background, it seems natural that he turned the business into an international company, but it wasn't easy.
"There is huge opportunity internationally and huge pitfalls, as I can vouch for in more ways than one," he said.
Spiller didn't mention it in his talk, but during the question-and-answer period he was asked about the pitfalls he faced after being charged with violating the Foreign Corrupt Practices Act. He was implicated in a federal government sting operation that brought charges against 22 executives.
A federal judge dismissed the charges against Spiller in March.
"It takes its toll," he said.
It was especially difficult for Spiller because he has not yet gained U.S. citizenship.
"For two and a half years, I didn't know if I'd be able to stay in this country," he said. "Here we are, two and a half years later, exonerated — $700,000 poorer (for legal fees) but still exonerated."
He said the 22 defendants spent a total of $32 million combined on legal fees.
"I'm just so grateful that it's over," Spiller said, adding that he is someone who can "still continue to hold his head up high in this city."
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