When a major acquisition takes place, there always is a lot of attention following the initial announcement and when the deal closes (or falls through, such as with Apollo and Cooper). What can be more interesting but unfortunately too often overlooked, is taking the opportunity a couple of years later to judge just how successful the deal was.
In the case of AirBoss of America Corp.'s purchase of Flexible Products Co., it appears the purchase so far is getting a passing grade.
Canadian-based AirBoss bought Flexible Products in October 2013 for $51 million, gaining a family owned firm in Auburn Hills, Mich., that had its fortunes clearly tied to the automotive market. Glenn Reid purchased the firm in 1980 with a $35,000 down payment and turned the business around, with Flexible Products evolving into a solid supplier of high performance rubber anti-vibration components for vehicles made both by the Detroit 3 and transplant car firms.
When the Great Recession pummeled the domestic automotive industry, Flexible Products bought additional presses at auction and refurbished them in anticipation of an economic recovery. So when things turned up and new car production in the U.S. began to climb again, Flexible Products saw its 2010 revenues of $64 million nearly double by 2014.
Reid, however, died in May 2013 and the family decided to sell the business because there wasn't another generation in place to pass on ownership to. His son, Doug Reid, himself a 38-year veteran of Flexible Products, had taken over as president of the business some years back and stayed on in that role after the AirBoss purchase.
Both sides clearly have benefited from the marriage. AirBoss projected 2014 revenues of about $110 million and EBITDA of $10 million from the Flexible Products business. What it ended up with was $125 million in sales and EBITDA of $13.4 million.
And Flexible Products gets an owner with the financial resources to invest in added capacity and expand the firm globally.
To borrow an over-used business-speak term, thus far it's clearly a “win-win.”