TWINSBURG, Ohio—A few things have changed in the 18 months since Lexington Precision Corp., backed by its private equity owner Industrial Growth Partners, purchased Twinsburg-based Quality Synthetic Rubber Inc.
Among those are the company's name, the top executive and the level of activity in such places as China and Europe.
For one thing, the Lexington name has disappeared from the corporate monitor, replaced by names all tied to the letter "Q."
Q Holding Co. now oversees QSR, a maker of automotive and industrial rubber goods with operations in Twinsburg; Jasper, Ga.; and Dong Guan, China. Qure Medical is the name that encompasses facilities in Sturtevant, Wis.; Rock Hill, S.C.; and a new facility ready to open in Dong Guan. And Quadra Tooling & Accessories supports those businesses by developing the proper molds and processes; its main location is North Canton, Ohio, but it also does work at Sturtevant as well.
The man in charge is Randy Ross, Q Holding Co. president and CEO. He was QSR's CEO before the purchase, then initially served as automotive group president of the combined firm before being promoted to the top slot.
Ross said the name changes haven't been a hindrance, particularly because the businesses aren't consumer products, but all business-to-business items. Their customers, he said, just want to know that the people they dealt with in the field are still in place.
Automotive/industrial remains about 65 percent of overall revenue, with parts ending up in autos, airplanes, trains, dishwashers and a variety of other applications. A long-term goal would be to have medical be half of sales, but he said that could be difficult because QSR has dominant positions in electrical connector seals and electrical insulation.
Adding more assembly work will be one way to boost that percentage.
"In medical, if instead of just making components, if we can put that assembly together, we can get a lot more revenue generation per business award," Ross said. "So we're doing some full wound drains now. We've got some full catheters. And the center for us to do that is really up in Wisconsin."
Ramping up in Europe
Both QSR and Qure Medical have a manufacturing presence in China, and Europe could be the next place to set up shop.
"We should be in Europe because we're shipping more and more product there," Ross said. "Whether we go to Europe with an acquisition or a Greenfield plant, we're going to have to be in Europe.
To date, the company has set up a GmbH firm in Germany, opened up a sales engineering office and added a distribution center for customers to buy Qure Medical products locally in Europe, he said. Having the distribution center is a big step, he added, because it takes one step out of the supply chain and allows the firm to sell to the market just as if it were a local producer.
The final step is to establish production. The benefits of a new operation would be to have a clean slate, but also by purchasing an existing firm, the company gets built-in production, a quality system, management team and a revenue base to grow from, according to Ross.
"I really like the acquisition side because I think we could infuse revenue and technology quickly," he said. "If we have to Greenfield, it takes 18 to 24 months to build a factor, get the infrastructure in place and get the team in place. The clean sheet of paper is a beautiful thing to start from, but it's expensive."
IGP has been supportive when the various Q Holding firms look to expand facilities or pursue acquisitions, he said.
"They're involved and not just counting beans at the end of the month," Ross said. "They want to know if you are developing a better business going forward. They tend to leave companies they buy in better shape than when they bought them."
One reason is that IGP is focused on manufacturing companies, he said. "Eight out of the 10 partners come from operating/engineering backgrounds. They're pretty hands-on, which I don't mind. I'd rather tell people what I think is going on and be a little more transparent and be told I'm wrong, then to do the wrong thing because I wasn't communicating well."
John Miller, Qure Medical technical support manager, worked at Quadra under Lexington for years before the acquisition and said the corporate culture was one of secrecy. He also said it was a rubber molder that solely was focused on wasteless/flashless process, which inhibited growth.
"There's so much more out there, but we couldn't get to it," Miller said. "It was one thought, one technology. Now everyday's a new project. Before we were sold we were just kind of stagnant. There was no room for growth. Now it's been very positive."