If you boil down what IPEG Inc. tries to do for its customers and employees, the answer is simple — add value. That’s the theme behind every move the parent company makes for its four industrial businesses: Conair, Republic Machine, Thermal Care Inc. and Pelletron, which between them employ 700 people, including 500 in the United States.
“Over the last six to eight years, we’ve tried to develop IPEG into much more than purely a holding company,” says CEO Chris Keller, who’s been in various IPEG management roles for 16 years.
It’s not a matter of centralizing, he says. Rather, it’s a pooling of resources to offer a higher level of support to each of the businesses — serving the global plastics-processing, pneumatic conveying, waste recycling and industrial heat-transfer markets — than it would be able to afford individually.
The oddity, however, is that as IPEG works to enhance each business, Keller’s personal goal has been to move in the opposite direction.
He’s attempting to make himself obsolete within IPEG by surrounding himself with the strongest possible teammates and empowering them to do what they do best. For example, at the end of 2016, Keller stepped back from the president role. As CEO, he focuses on strategy and culture.
“It’s not about me. It’s about our employees. It’s about the business. It’s about making sure we’re growing, we’re sustainable,” he says.
By owning industrial B2B companies where machinery is made to order, Keller says there is a high barrier to entry. It isn’t easy to build up a level of applications’ know-how to solve customer process challenges.
“We don’t make things by the millions. We don’t even make them by the thousands. We make them by the ones and the tens,” he says. “We have two product lines where we do sell a couple thousand units a year, but every single one of those is configured to order.”
Conair has been part of IPEG since 1986. Thermal Care and Republic Machine were added to the industrial group in 2013, and IPEG bought Pelletron in 2016.
IPEG owned Swedish company, Rapid Granulator, from 1998 to 2014. The business wasn’t for sale, Keller says, but IPEG received an offer from Sweden’s Lifco AB that it couldn’t refuse.
IPEG’s overall acquisition strategy values quality over quantity. Keller looks for $10 million to $50 million industrial businesses that are application intensive with intellectual property, a strong management team and an emphasis on legacy.
“It’s a very hot M&A market out there, right this minute, with lots of cash sloshing around — a lot of it in the hands of private equity funds and so forth,” he says. “We tend not to go looking for the auction process opportunities because those tend to be the ones that go to the highest bidders, and those aren’t probably the ones that are going to fit best for us. Forget about the fact that we don’t have $1 billion of cash in a fund with the clock ticking to be put to use.”
One of Keller’s priorities for 2017 and 2018 was to find potential acquisitions. He looked at dozens of opportunities and didn’t make a single offer. Some were too small. Some weren’t ready. Others didn’t fit what IPEG was looking for.
“While I love working on it, it’s really frustrating when you don’t have results to show for it,” he says.
But IPEG won’t do a deal just to do a deal. It doesn’t put out capital unless it sees a good business and a great cultural and strategic fit.
“The bottom line is, we say — it sounds joking to some people, but we’re dead serious — ‘We spend money like it’s our own because it is our own,’” he says.