At Matheson Tri-Gas it isn’t simply a case of treading water during stormy economic seas, as proved by the recent acquisition of leading US distributor Valley National Gases.
Rather than just drifting amidst difficult financial tides, Matheson Tri-Gas (MTG) is riding a wave of optimism that should see the company emerge even stronger from the effects of the global recession.
Despite the downturn, the close of March saw MTG announce a definitive agreement to acquire Valley National Gases – a deal which gasworld understands is now complete.
While mergers & acquisitions (M&A) are nothing new, more than a few eyebrows are likely to have been raised by the deal, especially during days of caution and cut-backs. Valley is the largest privately-held distributor of industrial, medical and specialty gases and had been acquiring a number of companies itself.
It will now fall under the banner of MTG and parent company Taiyo Nippon Sanso (TNSC), the fifth largest global producer of industrial gases, in a deal which sees MTG ready to capitalise on the recession recovery.
Speaking exclusively with gasworld, MTG Chairman and CEO William J. Kroll explained the positive approach at play, “During this period of time of financial turmoil, people are distracted and M&A is not necessarily at the top of everyone’s radar.”
“Ever watched surfers in the water? You get these long rollers (waves) out there, and they’re out there on those boards, they’ve got a face to the shore and they know where they want to go.”
“They keep looking backwards, they paddle around and once they see that wave building, the key thing is be positioned, start paddling, and get ready - because once that wave comes, if you miss it you’ll get to the shore eventually, but a long time after everybody else.”
Concluding the analogy, Kroll enthuses, “We have new technologies, new programmes both from a marketing point of view and a customer point of view that are unique - we want to position ourselves so that when this recovery does take off at full steam, we’re on the wave coming out so we are at least no worse than the best guys coming out. That’s the way we look at it.”
Clearly the company is keen to emerge from the downturn as strongly as possible, while the Valley acquisition also embodies the sense of optimism at MTG during the financial crisis.
gasworld understands there’s another motivation behind the deal too, that of building on the company’s ever-growing footprint.
Kroll told us, “It’s really as we’ve done before, if you look at our prior acquisitions, we’ve either invested in putting air separation capability in our existing distribution network, or putting a distribution network around our plant gas manufacturing.”
“What we’ve done in acquiring Five Star and Aeris is now built-in our own distribution (network) around us. So what’s in store for Matheson Tri-Gas if you now look at Valley? Well, while there are no ASUs as part of Valley, it gives us distribution in places in the US where we were not located before.”
“Matheson Tri-Gas goes coast to coast in a continuum now. We have some missing areas, but we’re building more of a national footprint.”
Recent reports suggest that the US distributor market is worth around $8bn, a market that appears to be increasingly of importance to the gas majors as they buy-up a number of independent distributors.
Surely this is a market of interest for MTG?
“It is and in adding Valley, it is really very reasonably complementary to us in this market and we can take advantage of lot of cross-selling opportunities,” Kroll responds.
“A really striking thing that we found early on in the deal is that the cultures of our companies are very much the same, from the way we look at safety, quality and customer service, to the inter-personal aspects of how we work and treat our employees.”
With the deal now ‘tied-up’ and an ‘integration team together’, the company’s mutual sense of excitement matches that of its optimism.
“Just a few weeks ago Valley was the largest independent in the US and now it’s part of the fifth largest industrial gas company in the world- it really is a special day,” Kroll says.
“I think that’s been the sentiment of both teams, that we’re really excited to work together. When you have a strategic owner that offers a lot of extra capabilities, I think that’s a dimension that the Valley team is really interested in, there’s all sorts of other things that they probably can do now that weren’t an option before.”
Noting the benefits for Valley, he adds, “By being part of a large multi-national corporation and a leader in the very business they’re in, they have resources that they didn’t have before, and not just financial resources.”
“This was a deal that strictly came out of dialogue and two corporations looking for ways of establishing a strategic alliance or synergy and working together.”
So what lies ahead? What might we expect to see from both MTG and the new synergy with Valley in the future?
Our chat draws to a conclusion and Kroll explains, “I think right now, we’re cautiously optimistic, we’ll keep grounded in what we do and do those things best. Our goal, as I said, is to come out of this downturn as good or better than everyone else does. I think we have the ability to do it.”
“I still think that there are other things for us to do in the distribution market and we think we have some good ideas, so let’s see if we execute them. We are the fifth largest industrial gas company in the world, we have unique things to offer.”