Stony Brook College of Business Innovation Center News

Ed Fabian (MBA 2008) shared with Tech Innovation MBA students his entrepreneurial experience of a management buyout (MBO) of American Eagle Systems.  AES provides audit compliance and data security solutions and software for clients managing large amounts of data.  

AES was started in 1976 as American Network Products (ANP) selling office furniture and labels and migrated to selling tape (magnetic media), and racking for the tapes. Ed joined ANP in 2003, grew it by adding services of moving and managing tape data centers and performing annual audits. ANP’s owner retired in 2007, and Ed bought it in 2011 with a new name of AES and a five-year loan from the previous owner.

The growth of AES stems from the fact that the larger firms become the more data that are generated daily and need security.  Data are backed up on tape in a Fuji 8-inch cassette.  This old technology is safe from water and fire. Daily millions of cassettes are hauled by firms like Iron Mountain to safe storage locations in mountains and mines. The data can be retrieved but rarely is.  The storage is a backup to the cloud and is cheaper than perpetual online cloud storage. This is the business idea of management of cheap data storage and management for clients that Ed brought to the company and developed after the owner sold him the business in 2007.

Because of the growth of AES, Trusted Data Systems bought AES in 2016 with the understanding that Ed would stay on for five years to transition the business.  Leveraged buyout (LBO) was the same kind of deal he did with the previous owner who retired and sold it. Ed is not ready for retirement but sees a peak and then decline of the use of the cassettes in the future. Large firms can do this work in house.  Small firms would use large firms to handle this service.

Ed’s experience of MBO and LBO positions him to help LI businesses grow in much the way that Marcus Lemonis does on the Profit broadcast on CNBC.

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