Peabody Engineering fields PE approaches, eyes international expansion, CEO says
Peabody Engineering, a manufacturer of plastic chemical tanks and other related plastic products, receives regular approaches from private equity suitors, though at this stage it has no clear exit timeline, said CEO Mark Peabody.
Approached “almost weekly” by suitors, the second generation family-owned business has no plans to raise new capital at this stage, the executive told this news service on the sidelines of the WEFTEC 2017 tradeshow in Chicago, Illinois.
Founded by Peabody’s father Richard “Dick” in 1952, the Corona, California-based company is now jointly owned by Peabody and his brother, Larry, 65. The company designs and manufactures fiberglass structural shapes, concealment systems for cell sites, and plastic storage tanks for industrial and commercial chemicals.
Peabody, 58, said there is not a clear exit strategy in place because the business is still in high growth mode, but mentioned that he would be open to discussions with potential buyers “at the right time, for the right price,” without specifying who might be the most logical acquirer or what the timeframe looks like.
In the meantime, during the next couple of years, the company will focus on further expanding its geographic footprint into Latin America and Australia, according to Peabody, who said he is actively in talks with domestic and international distributors.
Peabody Engineering sells its products through about 40 distributors to close to a dozen foreign countries such as Canada, Australia and Mexico. Waukegan, Illinois-based USABlueBook is one of its biggest distributors, Peabody noted.
The company currently has under USD 25m in revenue and has been growing at 10% to 15% annually, Peabody said, adding that the business has EBITDA margins close to the industry average of 8% to 10%.
Although not actively seeking buys, Peabody said he would be interested in acquiring smaller businesses who either manufacture complementary products or has geographic presence in areas of interest.
The majority of the company’s business comes from municipalities, chemical companies and water treatment companies, Peabody said. One primary client would be Canada-based Trojan Technologies.
Monroe, Louisiana-based Poly Processing and Garrett, Indiana-based Assmann are some of Peabody Engineering’s direct competitors, according to the executive.
Bates Coughtry Reiss and Clayson, Bainer & Saunders provide accounting and legal services for the business, respectively. Its commercial banker is First Citizens Bank.