A mergers and acquisitions advisory firm has gone back to its roots to focus on deals in the fluid power industry, and they are banking on a team that has both operations and transactions experience in the sector to help it succeed.
Whitestone Associates L.L.C. has been around for more than a quarter-century and in recent years had provided M&A services in a variety of industries, but decided it would be best to concentrate on the wide variety of firms involved in the fluid power world, including both OEM manufacturers and distributors, according to Frank Gallucci, the firm's founder and senior managing director.
"We think we are the only ones in the M&A world that has that exclusive focus," he said. "There are a bundle of companies that can work here, but we are working here exclusively, and we are here working with the support of a team that have been operating guys first, and that is probably what distinguishes us."
Gallucci said transactional experience—like those held by staff at traditional financial firms—can be viewed as somewhat of a commodity, but that Whitestone can look at potential transactions from an entirely different experience, and that's what will help it be successful in this space.
In fact, many in the hose industry will recognize the name of one of Whitestonee's newest team members, Jeff Finch, a senior director who spent more than two decades with Eaton and Aeroquip. Finch joined Whitestone in May 2017, and he also brings the viewpoint of one who has been on both sides of the M&A equation. He was with Aeroquip when Eaton purchased them, and then as an executive at Eaton he was heavily involved in a number of acquisitions and the integrations that followed.
"It's a totally different experience if you're the buyer or you're the seller," he said. "You remember all the bad things that happened to you and not so much the good things."
Members of the Whitestone team have seen the fluid power field from both the manufacturing and distribution perspective, with some involved as owners of distribution firms.
"I think the experience is critical because we understand the language, we understand the products, we understand the markets, we understand the applications and the channels of distribution," Finch said. "These are things you don't get unless you spend decades in the industry. If you're just doing deals for the sake of doing deals, you can understand the financial aspects, but you really don't get into the heart of the matter in terms of what it took for the distributor to grow the business, or what kind of channel rules and regulations given manufacturers have."