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SSPC, NACE Merger Discussions Continue

Wednesday, October 23, 2019

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SSPC: The Society for Protective Coatings and NACE International, The Corrosion Society announced Monday (Oct. 21) that discussions were continuing the potential collaborative efforts for the possible merger of the two organizations.

Both organizations serve in the field of corrosion and coatings standards, as well as providing training and certifications.

Exploratory Talks

SSPC, founded in 1950 as the Steel Structures Painting Council, is focused on the use of protective coatings in the industry. SSPC’s name was changed in 1997 to mark progress in coatings technology, as well as the addition of new types of construction materials. SSPC is based in Pittsburgh, and has offices in Saudi Arabia, Malaysia and China. Currently, more than 16,000 professionals and 420 companies across the globe carry SSPC certifications.

NACE, founded in 1943 and now with more than 38,000 members in 130 countries, is the world’s largest nonprofit of its kind, according to the organization. NACE is based in Houston, with other offices across the U.S., the U.K., China, Malaysia, Brazil and Saudi Arabia, as well as a training center in Dubai. Membership with NACE includes specified technical training and certification programs, industry standards, reports, conferences and publications focused on corrosion prevention and mitigation.

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SSPC: The Society for Protective Coatings and NACE International, The Corrosion Society announced Monday (Oct. 21) that discussions were continuing the potential collaborative efforts for the possible merger of the two organizations.

In March, the two organizations announced the beginning of merger talks. The following month, PaintSquare Daily News took a closer look at each organization’s history, structure and offerings for the protective coatings and corrosion control industries.

On Aug. 6, the organizations announced the mutual decision to bring McKinley Advisors on board as a guiding entity for the two organizations’ merger discussions.

McKinley Advisors, serving as an independent third party, was chosen for its established success in advising other organizations through similar talks. McKinley will also advise through considerations related to strategic, financial and cultural barriers, among others.

"Bringing together associations that share meaningful missions like NACE and SSPC is one of the many rewarding aspects about our work,” said Jay Younger, FASAE, President and CEO, McKinley Advisors.

“The recognition of their members' best interests demonstrates strong leadership and a dedication to living their values. Our team is experienced in this area and looks forward to uniting the goals of two great associations and advancing their efforts."

Most recently, at the reestablished Pittsburgh-based SSPC Steel City Chapter meeting earlier this month, it was announced that on Oct. 29, a NACE board meeting with the McKinley CEO and two SSPC board members is expected to take place in Asheville, North Carolina. The merger task group was also reported to be planning to schedule additional face-to-face meetings later this year or by January 2020.

Recent Discussion

As reported in an SSPC press release, last month joint staff and members of the leadership task group from both SSPC and NACE reconvened to continue possible merger conversations.

The meeting reportedly focused on the research and analysis conducted by McKinley Advisors on the potential challenges the organizations would face regarding blending financial structures, cultures, memberships and other components.

Out of 50 interviews—25 NACE and 25 SSPC designated individuals—McKinley reported that leading stakeholder concerns lied with the potential loss of relevance or voice in a larger organization, as well as whether all certifications of both organizations would continue to be recognized and supported.

In addition to the interview, the task force was asked to focus on developing a straw model during the meeting that would combine SSPC and NACE with emphasis on corporate and governance structure, aligning key organizational functions, exploring a membership model and value propositions.

“If we merge, we will rely on a joint member task force to make recommendations around certifications,” said SSPC President Joe Walker. “The task force would work under a set of parameters focused on allowing certification holders to be grandfathered in and to then recertify into a continuing certification with no financial burden to do so.”

NACE President Terry Greenfield added, “Our members are the lifeblood of our organizations and we agreed that we must work to keep the best of what each organization offers its members.

“We also agreed that membership tenure of any individuals or corporations will be carried over. And if a member has been involved with both organizations, the longer term of their two memberships would be applied.”

While a large portion of the meeting was reported to have been devoted to developing the straw model for governance, discussions regarding member leadership terms, in addition to leadership roles and responsibilities concerns were also brought forward.

What Happens Next

In McKinley’s findings, no substantive hurdles were reported that would threaten the proposed merger and it also added that the current financial model is sufficient, while legal teams from both organizations presented an overview of possible corporate structures.

Moving forward, the organizations have announced that both existing brands will continue to be protected as sperate entities in the marketplace and have agreed that the best model will involve a hybrid structure that includes both corporate and individual membership options and combines the best of both organizations’ value propositions.

In taking the next steps, the task group plans to complete remaining research into considerations raised during the September meeting and will meet again in early 2020. During the time in-between, bimonthly task group calls will continue. All information collected during these meetings will then be shared with members from both organizations.

In the decision to merge SSPC and NACE, the Board of SSPC will vote during its first-quarter meeting on Feb. 1, 2020. NACE International’s Board will vote at its first meeting of the year on March 14, 2020. Members of both organizations will be asked to vote on or around April 1, 2020.

Any questions can be sent to cooperation@nace.org or news@sspc.org in the meantime.

   

Tagged categories: Acquisitions; Asia Pacific; Business management; Business matters; Business operations; EMEA (Europe, Middle East and Africa); Latin America; Mergers; NACE; North America; Program/Project Management; Project Management; SSPC; Z-Continents

Comment from Gordon Kuljian, (10/23/2019, 10:14 AM)

I suggest some kind of forum for discussion on this topic at the upcoming conference in Long Beach. Here you will find the SSPC membership well represented (contractors, suppliers, consultants, facility owners, etc.). Give each member who wishes to voice an opinion 1-2 minutes at a microphone. Record the meeting and analyze the results. I think it would be well attended, if you advertise it in advance. What do you think?


Comment from peter gibson, (10/23/2019, 10:32 AM)

brilliant idea.


Comment from Michael Kline, (10/24/2019, 9:16 AM)

Hi Gordon and Peter. This idea is under consideration as part of a broader communications initiative which is currently under development by the merger task group. Details are not firm at this point, but I know that both organizations are looking at their respective conferences as great places to do this. Stay tuned for more over the coming weeks.


Comment from Jon Cavallo, (10/24/2019, 10:50 AM)

Rather than having various open forums at this time while few merger details have even been defined by SSPC and NACE, which would result in a zillion questions from the memberships with no answers at this time, I suggest that the mediation company periodically issue a "ready for prime time" progress report which would provide the results of discussions to date and identify discussions to come.


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