DENVER—After almost two years of ownership by Blackstone Group L.P. of New York, Gates Corp. is pursuing growth on multiple fronts in 2018 and beyond.
One of those fronts is an IPO slated for next year, on top of growth via hiring and acquisition, as well as new facilities in the coming years, said Tom Wells, Gates sales director, national accounts, in the firm's industrial replacement and services group.
Those avenues of growth are being driven by Blackstone, a $300 billion private equity group, he said.
As a $4 billion global company, increases in staff or investment were met with even bigger proposals from Blackstone, Wells said.
"Blackstone came in and would say, 'What do you need in order to grow?' And we'd say, 'We need 10 or 15 people.' And then they would say, 'What if you had 100?' We've never been able to think in this kind of scale before," he said.
Realigning the company mindset, Gates pushed toward Blackstone's objective for growth with expanded resources. Gates, which serves both automotive and industrial markets, has seen steady growth in the past few years, partially because of the recovery of oil and gas as well as backing from Blackstone, he said.
Typically, both the automotive and industrial markets work in alternating cycles, keeping Gates diversified.
"This is one of the few years when we're hitting on all cylinders, when all the parts of the company are doing well," Wells said.
Within Gates' power transmission unit, business has balanced out between the original equipment manufacturer and replacement sides. Because Gates has less business on the OEM side, there's more stable, predictable growth, with fewer wild swings, Wells said. Gates' OEM business is up by double digits, partially because of the recovery of oil and gas, and the replacement side is up by 25 percent.
Part of Blackstone's drive for growth is encouraging more diversity in business, Wells said.
"We're working our way to try to be a more diverse company, to look at new and alternate channel partners that we might not have considered before, or who weren't in our particular focus or wheelhouse," Wells said. "To me, if you're a big and successful industrial distributor, it doesn't matter what you're selling, you know how to go to market. Maybe we introduce our products to those types of channels."
"New and different" might include a company like Fastenal, which is very maintenance, repair and operations-oriented, profit- and plant-focused, Wells said.
"We're introducing starting a more diverse relationship with people like that. That's outside our normal channel, which would be mechanical power transmission or fluid power," Wells said.