Friday, December 21, 2012
by Cole Epley (cepley@bizjournals.com)
It’s been a busy year for Centro Inc., a Memphis-based sales representative and distributor of valves, pumps, mixers and other products for the flow control industry. So far in 2012, it has made six announcements of mergers or acquisitions.
But the company had one final announcement to make before throwing in the towel for 2012: its acquisition of Mobile, Ala.-based Technical Specialties Inc., a flow control industry counterpart that Centro president Mike Gallagher estimated will boost the company’s 2013 sales volume by as much as $4 million.
Gallagher said Centro will approach $41 million in sales in 2012 and he expects next year to be even more fruitful.
“Our forecast is to be at $54 million in sales,” he said.
Centro was recognized by MBJ as a Small Business of the Year recipient at the 32nd Small Business Awards program in May and has seen significant regional growth in 2012.
For example, the company announced the acquisition of two Louisiana companies in November. The most recent acquisition, however, materialized much quicker than the other half-dozen.
“This deal moved fairly quickly,” Gallagher said. “But it still took the better part of six or seven months to complete.”
Helping drive Centro’s M&A activity through 2012 was uncertainty surrounding future tax treatment of capital gains. Gallagher said the company anticipated that as a possibility and seized the opportunities as they came along, though some of the announcements were years in the making.
“(Tax treatment) was less important for us than it was to the people selling (Technical Specialties Inc.),” he said. “But when we wrote our financial plan at the end of 2011, we knew this could happen.”
The company has added 35 new employees to its payroll over the past 12 months and will settle at 93 total employees to end the year. With the news of the latest announcement, Gallagher sought to quell any anxiety about additional last-minute acquisitions in an e-mail message to Centro employees.
“Thank you all for your hard work this year on the other acquisitions and integrations,” Gallagher wrote in a Dec. 20 message. “I promise not to buy anything else this year.”
Original article appeared in the Memphis Business Journal.