Deals Start Flowing again at FCX Performance

admin — Mon, 17 Jan 2011 09:38:40 GMT

Deal flow is a popular term in the private equity world.

Columbus-based FCX Performance Inc . knows plenty about flow and has become accustomed to deals, as both a buyer and seller. The 27-year-old valve and process flow product distributor’s latest additions are the Solares Controls division of Lakeland, Fla.-based Solares Florida Corp. and Stafford, Texas-based Baro Cos., both acquired for undisclosed sums in deals disclosed this month.

“This is new geographic markets in both cases,” said CFO Charles Hale. “We’ve been looking at the Gulf Coast for eight to 10 years. There are miles and miles of chemical and petroleum plants along the coast and that’s the biggest market for us domestically.”

Chairman Charles Santoro said the deals allow FCX to expand its product portfolio and geographic reach to include the entire U.S. except California.

“If (FCX) is not the largest independent in the industry, it’s one of a very small number,” he said.

FCX sells valves and valve instruments to a broad array of industries, including oil and gas, chemical, pharmaceutical, steel, utilities and food processing.

“It’s not a glamorous business, but it’s an important part of a processing plant,” Hale said.

The company assembles and distributes products at four facilities, the biggest in Columbus, with the others in Charlotte, N.C.; Appleton, Wis.; and Houston as a result of the Baro deal. It also runs 21 sales offices.

The Baro acquisition included the operations of Baro Controls Inc. and Baro Process Products. The Texas company, which specializes in valve automation, pumps and mixers, gives FCX a presence on the coast of the Gulf of Mexico working with the chemical, petrochemical, oil and gas pipeline, refinery and power industries.

Hale said the business in Florida is a growing market and Solares is an established name. The Florida company will see less industrial work and more in the citrus, waste water and fertilizer markets. The names, employment and operations of the companies will not change.

Santoro is co-founder and managing partner of Sterling Investment Partners , a middle-market private equity firm from Westport, Conn., that acquired a majority share of FCX in 2008. FCX, based near Port Columbus International Airport, was founded in 1984 by CEO Charles Simon.

Santoro said Sterling became interested in FCX in summer 2008 and closed the deal a week after Lehman Brothers Holdings Inc. filed for Chapter 11 bankruptcy protection, touching off the financial downturn.

“Even in that macro environment, we never lost sight of the fact that this was a very dynamic distribution platform,” he said. “It’s highly scalable.”

Going on the offensive

The arrival of Sterling coincided with a drop in the economy. Even in a niche like valves, FCX’s story the past few years is similar to that of many other companies. The vast majority of its products are in use every day, Hale said, but as production slowed for customers, use slowed and sales followed that path.

Sales began softening toward the end of 2008, and the following year brought a 9 percent sales decline. Revenue rebounded in 2010, closing up 10 percent to $139 million. That was without acquisitions.

Hale said the company anticipates that revenue swing will continue into 2011 regardless of acquisitions, with internal sales growth projected at 8 percent to 10 percent. Including revenue from Solares and Baro, FCX projects its 2011 sales at $180 million.

The top line could rise with more deals, something the company is pursuing. FCX has grown through acquisitions, with 10 deals since 2000, including three since its purchase by Sterling in 2008. Hale said FCX targets established businesses with strong management. The goal is to build a portfolio that is diverse in geography and markets to provide some cushion against industry fluctuations, Hale said. In 2009, the chemical and refinery businesses were slow for FCX, but the power and utilities sectors were up. All segments grew last year.

Hale said deals in existing markets will be to add product lines, and the business wants to continue to expand geographically.

“(FCX) navigated the downturn great,” Santoro said. “Now we can play some offense. ... We love the business and look forward to watching it grow.”

614-220-5462 | deaton@bizjournals.com

FCX Performance Inc.

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FCX Performance, Inc. acquires leading regional distributors

admin — Wed, 05 Jan 2011 12:12:06 GMT

January 3, 2011 – Columbus, OH

– Columbus, OH-based FCX Performance, Inc. ("FCX) announced today that it has completed two acquisitions that will expand its product & service offering as well its geographic reach. The two transactions include the acquisition of the Solares Controls Division of Solares Florida Corporation and Stafford, TX-based Baro Companies, which include the operations of Baro Controls, Inc. and Baro Process Products.

Based in Lakeland, FL, Solares Controls serves the growing Florida process control market. Over many years, Solares has developed deep customer relationships and is well-established in this region’s process valve and instrumentation market.

Baro serves the large and Gulf Coast market and is a recognized leader in valve automation, pumps mixers and related products & services. The company serves the complex needs of the chemical, petro-chemical, oil & gas pipeline, refinery, power and other process markets.

Shelly White, co-owner and President, of Baro stated, "Our Company will continue to provide our customers with the same high level of service they have come to expect from Baro." She continued, "We are excited to join the FCX family. This partnership will help us create an even stronger business by providing additional resources to support and serve our customers."

"We welcome the employees, vendors and customers of Solares and Baro to the FCX family", said Charles M. Simon, President and CEO of FCX Performance, Inc. "We are very impressed by the caliber of the Baro and Solares people and are excited to work with the new management teams to build on the impressive record of growth that both companies have achieved." Simon concluded by noting that "the combination of these businesses will not result in any outside changes and the company’s names will not be changed".

Charles Hale, FCX Chief Financial Officer, added "These acquisitions fit perfectly with FCX’s corporate strategy of buying quality businesses and providing talented management teams with the additional resources to accelerate their growth plans." "With the support of our majority investor, Sterling Investment Partners, we fully anticipate closing additional acquisitions in FY 2011."

FCX Performance is a leading distributor of process flow control products and services that serves MRO and OEM customers in the pulp & paper, chemical, petroleum pharmaceutical, power, steel and other process markets. Formed in 1999, FCX has 16 offices serving 30 states and over 235 employees and is recognized for its ability to provide innovative solutions to meet the most complex and challenging applications. FCX has vast product knowledge and technical expertise in valves, instruments, pumps, hose, fittings and process flow control equipment.

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Deals Start Flowing again at FCX Performance

Going on the offensive

FCX Performance Inc.

FCX Performance, Inc. acquires leading regional distributors