BALLSTON SPA, N.Y.—Specialty Silicone Products Inc. checked all the boxes Heico Corp. was looking for in a prospective company.
The firm agreed to acquire SSP, which produces silicone products for a variety of high-demand industries, on Nov. 1 for an undisclosed amount. Heico said SSP will be integrated into its Electronic Technologies Group, but continue to operate as a stand-alone entity with all of its employees and management team transferring in the deal.
"We look for companies that make very high-quality, high-end products, that are in niche markets and that are very well regarded by their customers," said Victor Mendelson, president of Heico's Electronic Technologies Group.
"Our typical acquisition is one like SSP where we're buying from the entrepreneur founders. They decided it was the right time. We generally leave the businesses alone as standalone operations with the same management, company name, location and people. We basically leave them alone and provide assistance where we can, or when we're asked to provide assistance. I think they felt we would be a very good home for the business compared to alternatives, other buyers looking to buy and consolidate."
SSP President Paul DiCaprio said the company's remaining owners—Fred Sober, Ted Taylor and Patricia Babbie-Reo—sought an exit strategy when their fourth partner, Dan Natarelli, died at age 85 in December 2017. But they also wanted to make sure that the company and its employees were well taken care of, and Heico quickly emerged as a viable suitor on that front.
From a business standpoint, Heico brings a number of advantages for SSP, which operates out of a 51,000-sq.-ft. building in Ballston Spa. That includes helping SSP achieve stricter quality standards to further break into its core industries. SSP is currently ISO 9001:2015, but DiCaprio said the firm needs to move toward AS90100 and ISO 13485, the standard for medical devices.
"Heico has the resources both financially and personnel-wise to assist us as we move toward higher quality standards," DiCaprio said. "Heico has lots of experience in those areas, so they will be able to help us get to those certifications faster than if we did it on our own."
SSP's primary product line is septa caps—a PTFE or silicone liner material that's used for analytical testing. The firm makes rolls of these materials by punching and inserting them into caps, which are then sold with glass vials and other testing equipment or consumables for the analytical chemists. The sample is placed into the vial, which is eventually pierced by a needle. The septa keeps the sample contaminant free before the injection and after the testing by re-sealing itself when the needle is removed.
SSP also produces silicones for EMI/RFI shielding, medical and aerospace/military grade applications. DiCaprio said the firm most recently expanded in 2015, adding an 18,500-sq.-ft. Class 6 clean room for its lab products business. It is in the early planning stages for adding a USP Class 6 and aerospace grade materials clean room, which will also span about 18,500 square feet.
He added that business in 2018 has been strong for the company, particularly in its lab products area. Being part of the Heico network of companies will further expose it to new opportunities.
"Heico's other subsidiaries are selling parts to companies we could be selling product to as well," DiCaprio said. "They work very well together in trying to expose other businesses to markets."
Mendelson said he, along with his brother and father, took control of Heico in 1990, and since has had a 17-18 percent compound annual growth rate in that span split evenly between acquisitions and organic opportunities. The firm has made about 70 acquisitions since 1996.
Heico's Electronic Technologies Group employs about 2,200 with about 24 facilities in the U.S., South Korea, France, England and Canada. Mendelson said about 70 percent of its business is aerospace and defense with the remainder in other high-end markets like medical, which makes SSP a perfect addition to enhance its presence in those areas.
"SSP brings us a series of niche high-end, high-quality products that are critical to their customers," Mendelson said of SSP. "We like their EMI/RFI product line very much. It also brings us an excellent management team and breadth, with additional product lines."