Acquiring minds

Aggressive acquisitions enabled Medina-based RPM, a specialty coatings manufacturer, to grow from $3 million in sales in 1961 to more than $2 billion today.

Thomas C. Sullivan, the non-executive chairman of the company, followed his father’s advice to achieve such exponential growth.

“At the time of my father’s death in 1971, Republic Powdered Metals — the company he founded and the forerunner to RPM Inc. — was doing $11 million in sales,” says Sullivan. “We formed RPM Inc. at that time to act as a holding company, using the philosophy in an acquisition strategy that mirrored his people philosophy: ‘Go out and find the best companies in the industry, create the atmosphere to keep their management and then let them do their jobs.’ This was very unique in our industry and, I am sure, the reason that our acquisition program has been so successful.”

Unlike other companies that look to capture synergies through painful cost-reduction initiatives, RPM’s successful mergers and acquisition track record of more than 90 transactions in its corporate history is attributed to its approach of leaving management in place.

“Today, RPM is organized into six platforms, three each in our consumer and industrial divisions,” says Sullivan. “This allows us now to do ‘bolt-on’ acquisitions, where management does not stay with the operation. It also allows us to do acquisitions using our original philosophy.”

For employees, this approach has created a motivating and empowering environment. Likewise, companies and their employees join RPM knowing they will have an opportunity to share in the success of a larger, more profitable business. For customers, it created a stable business partner with a broad range, offering of leading industrial and consumer brand-name products and led by seasoned management.

This approach to acquisitions has also rewarded shareholders with 55 years of record growth and 29 years of increasing dividends, placing the company in the top 1/2 of 1 percent of all U.S. publicly traded companies in terms of dividend increases.

Since 1971, RPM shareholders have received an annual compounded rate of return of approximately 16 percent with dividends reinvested. How to reach: RPM, (330) 273-5090