Saturday, April 07, 2007
Centro Inc. has purchased Pelican Industrial Equipment Co. in a move that continues the company’s expansion to industrial clients over a five-state area.
The deal marks the second major acquisition for the Memphis-based company since owners Michaels Gallagher and Dave Forell took over Centro in December 2001. In October 2003, the partners purchased Green Controls, Inc., of Little Rock.
The purchase of Pelican adds a forth division to the company, and is expected to boost Centro’s sales to about $25 million this year.
“The acquisition of Pelican enables Centro to offer additional solutions for increased manufacturing productivity and profitability across South Arkansas, North Louisiana and East Texas,” says Gallagher, Centro’ president.
Founded in 1993, Pelican sells and services compressors, pumps, abrasive blasting and spray equipment to industries in the three states. The company is headquartered in Shreveport, has operations in Longview, Texas, and had sales of $1.6 million in 2005.
Gallagher and Pelican president Bill Johnston were introduced through a Centro employee who previously worked for Pelican, and began discussing the possibility of an acquisition in December.
“We were attracted to Pelican’s product line and he was attracted to Centro as a company that has had significant growth over the last several years.” Gallagher says.
Centro sells, repairs and maintains industrial parts and equipment to companies in various industries with clients including Chemtura Corp., Valero Energy Corp. and Coors Brewing Co. The company has had compound annual growth of 16.9% in recent years with sales increasing from $11.2 million in 2001 to $21.1 million in 2005.
Centro already had company divisions for Instrumentation, Automation and Sanitary Products; Valve, Actuation and Engineered Products; and Process Filtration. Adding a Compressor and Pump Division seemed like a natural extension of the company’s existing offerings, Gallagher says.
For Johnston, the deal offered the opportunity to merge Pelican with a stable and growing company. Pelican was named one of the country’s fastest-growing companies by Entrepreneur magazine in October 1995, but Johnston says a variety of circumstances have caused sales to fluctuate in recent years.
“It’s kind of a diamond in the rough that could be polished up,” Johnston says.
Gallagher says the company has hired all seven of Pelican’s employees. Founded in 1970, Centro now has 59 employees at its operations in Memphis, Nashville, Little Rock, Shreveport and Longview, Texas.
Johnston will stay on as a consultant with the company, but says he is looking forward to semi-retirement.
“I just turned 60 and suddenly I thought about all the things my wife and I could be doing if I wasn’t working,” he says. “It will be nice to have the responsibility of running a company off my shoulders.”