A tip from a vendor led Jason Smith to the first acquisition in the 150-year history of his family’s company in upstate New York.
Smith, as president and CEO of Troy Industrial Solutions, is buying a motor shop in southwest Connecticut. He expects the purchase to close early next month.
The purchase signals that Troy Industrial Solutions views geographic expansion as the best way to drive growth. The acquisition also enables Smith, age 35, to put his stamp on the company after ascending to the top executive role earlier this year.
“This is the first rung, to see how well we can bring what we do here into a new market,” Smith tells me. “We’ll morph that company into what we are here.”
Troy Industrial (which is actually across the Hudson River, in Watervliet) has 70 employees. More will be needed in future years as the company expands its newly acquired business in Connecticut.
Troy Industrial focuses on repair and maintenance of electric motors that run industrial machines. Clients include paper mills, quarries, power plants and heavy manufacturing.
Troy Industrial is buying B&J Electric Motor Repair, which has been operating for 60 years. There are eight employees and about $1.7 million or so in annual sales, Smith says.
The Connecticut company works on smaller engines than Troy Industrial. There is also a much stronger presence of OEMs, or original equipment manufacturers, which could diversify Troy Industrial’s customer base.
Smith declined to disclose the purchase price. The company did access some bank financing, along with using its own capital.
“They’re second-generation. They had no exit strategy, and that’s just the business we were looking for,” says Dave Barcomb, general manager at Troy Industrial.
Troy Industrial expects to end the year with revenue growth near 10 percent.
By Adam Sichko
Nov. 14, 2013