MEDINA, Ohio—RPM Inc. CEO Frank Sullivan says there's a reason his Medina-based specialty coatings company closed on five acquisitions over a two-month period in December and January: Donald Trump.
But Sullivan said there's another reason RPM intends to keep up the fast pace of acquisitions it's been keeping in recent years: growth.
The company will continue to do a large quantity of deals, but of smaller companies, in keeping with its strategy to grow via acquisitions, he said.
"We want to get as many plate appearances as we can, but we're never swinging for the fences," Sullivan said. "We'd rather hit for average and get singles and doubles."
For the record, in December RPM closed its acquisition of the foam division of Clayton Corp., which has annual sales of $60 million. It also purchased SPS Group, a Dutch decorative and specialty coatings company with annual net sales of approximately $60 million.
Then, in early January, it bought Arizona-based Prochem and Missouri-based Arnette Polymers, companies with combined sales of $42 million. And on Jan. 17, RPM purchased Conyers, Ga.-based Prime Resins, a small company with just $7 million in annual sales, but one that makes products RPM hopes will be used in national infrastructure investment.
Those deals piled up at the end of the year partly because of the election, Sullivan said, as sellers tried to time their sale to close in the year they thought would have the lowest tax rate on capital gains.
"The deals we announced in January were all deals set to close at the end of November," Sullivan said. "In each case, they had wanted to be sure it got closed before Dec. 31, because ... they were sure Hillary Clinton was going to elected and raise taxes for 2017."
Like a lot of folks, Sullivan's sellers were surprised when Donald Trump won instead.
"Then they all wanted to push their deals into 2017 because now they were convinced the capital gains they would pay in 2017 would go down," Sullivan said with a chuckle. "Donald Trump gets elected and each one of the three sellers says, 'Stop. We're closing in 2017, not 2016.'"
But while those deals might have gotten packed into a short time span because of the election, they are not out of character for RPM. They're also an indication of its future plans.
For a company like RPM, with nearly $5 billion in annual sales, these deals are small. But they dovetail with existing products and allow the company to cross-sell new products and gain a presence in new markets and geographies.