CINCINNATI, OHIO, Nov. 10, 2010 – A rapid transformation is taking place among commercial and industrial businesses that rely on critical manufacturing, transportation and process equipment in the United States, prompting an unprecedented response from four leading lubricant product and services companies. Backed by the international private equity investment firm AEA Investors LP, the four businesses have joined forces to form RelaDyne, Inc. The new company offers an industry-leading comprehensive platform of products and services to fulfill the unmet customer needs of industrial and commercial equipment users, as well as service centers in the automotive sector.
According to RelaDyne Board Chairman Tony Castor, research shows U.S. industry wastes at least $600 billion per year on inefficient and ineffective equipment maintenance. RelaDyne was formed to create the market leader in providing the necessary products and services to help companies achieve “best-in-class” equipment reliability performance levels and a greater return on commercial and industrial equipment assets, which is vital to their business profitability and success. “In addition to the company’s established distribution network and customer service capabilities, RelaDyne will distinguish itself from competitors with a focus on value-added services,” said RelaDyne Chief Executive Officer Larry Stoddard. These Field Reliability Management (FRM) service offerings are organized as a separate group within the company and provide customers with a suite of comprehensive solutions to improve equipment up-time, production output and bottom-line profitability.
RelaDyne was built upon the solid foundation of four successful businesses – Mid-Town Petroleum, Inc. (Bridgeview, IL); Oil Distributing Company (Cincinnati, OH); The Hurt Company, Inc. (Houston, TX) and Pumpelly Oil Company (Sulphur, LA). Combined, they have more than 225 years of experience in the lubricant products and related equipment reliability services industry. “These RelaDyne founding businesses have been successful because they’ve always listened to their customers’ needs and provided innovative solutions to make their business operations more reliable, productive and profitable,” Stoddard said. “This is the solid, customer-centric foundation upon which RelaDyne is built.”
Industry Focused Sales, Market Expansion
The initial RelaDyne sales, distribution and services platform is strategically located within the central corridor of the United States, a territory that accounts for approximately 50 percent of the U.S. lubricant market. RelaDyne operates 12 distribution centers in eight states within this corridor throughout the Midwest and Gulf Coast regions, and is expected to deliver more than 16 million gallons of lubricants in 2010.
RelaDyne is investing in industry-dedicated sales professionals, field technicians, reliability solutions specialists and associate training, all of which will provide new career opportunities for existing employees, according to Stoddard. There also are plans to eventually hire additional personnel to service its customer base, which is expected to grow significantly in the coming years, he said.
“One of the most attractive features of RelaDyne is that each organization brings a distinctive value proposition and core competency to customers,” Stoddard said. Mid-Town Petroleum excels in industrial sales and marketing, as well as the manufacturing of custom-blended specialty niche lubricants; The Hurt Company has built unparalleled expertise in FRM services and will be championing this offering at RelaDyne; Oil Distributing Company brings nearly three decades of sales and marketing experience in the automotive industry; and Pumpelly Oil Company has unmatched expertise in the commercial market and is a leading seller of diesel exhaust fluid (DEF), used to lower harmful diesel emissions in new truck engines. The owners of each of the four founding businesses are assuming leadership roles at RelaDyne best suited to their skills and experience.
“I am excited about the potential to work with such a terrific group of entrepreneurs and help them take their successful platforms to the next level,” continued Stoddard, who brings to RelaDyne significant experience in growing distribution companies.
Stoddard started his career with Ferguson Enterprises Inc. During his 27-year tenure, he was a vital part of Ferguson’s growth which rose from $140 million to $11 billion in distribution of plumbing and construction-related products. During his career, he ultimately became COO of Ferguson’s parent, Wolseley, which at the time was a $34 billion distributor of building products. He also has served as CEO of Bradco Supply, a leading roofing supply company in North America, and currently he is chairman of Crescent Electric Supply.
Jeff Hart, executive vice president of business development, added that the RelaDyne management team and its sponsors are committed to growing the company through a variety of initiatives, including exploring acquisitions in the distribution channel to further expand in targeted geographies and service-related businesses where there is opportunity to leverage RelaDyne’s comprehensive business model.
Field Reliability Management
According to Jay Hurt, executive vice president for RelaDyne’s FRM services platform, its rollout is the first of its kind in the industrial and commercial markets. He said while most other lubricant distributors only distribute products, some try to provide training or consulting, but they cannot offer the scale nor breadth of solutions needed. With its FRM capabilities, RelaDyne certified lubricant technicians work in the field at customer locations implementing innovative processes and services that keep plants, vehicles or machinery performing reliably, Hurt said.
The FRM platform includes such services as contamination control, assessing storage and use of lubricants, flushing and filtering lubricants for extended life, plant turnarounds, oiler outsourcing, as well as designing and implementing lubrication programs that create measurable results for greater uptime and cost savings.
“FRM will appeal to companies that in the past have lost valuable production time due to equipment failures, as well as organizations trying to increase profit margins by using fewer products and improving their efficiency,” Hurt said. “This includes companies involved in process manufacturing, utilities, food and beverage processing plants, mining equipment and commercial fleets, to name a few.”
Hurt said one Texas oil refinery documented more than $1 million in cost savings over four years because of proactive steps recommended by his company. “Our customer was able to reduce equipment failures by 25 percent using only a piece of what we now call FRM,” he said.
Stoddard said, “This is the first time that a one-stop lubricant product and equipment-reliability services provider has been available to customers in this industry. RelaDyne makes it easier for our customers to acquire lubrication products and services. Working with us, there is no longer a need to source from multiple distributors.”
About RelaDyne
RelaDyne, Inc., headquartered in Cincinnati, Ohio, is one of the largest providers of integrated equipment reliability management products and services for industrial, commercial, transportation and automotive businesses in the United States. Four industry leaders–Mid-Town Petroleum, Inc. (Bridgeview, IL), Oil Distributing Company (Cincinnati, OH), The Hurt Company, Inc. (Houston, TX) and Pumpelly Oil Company (Sulphur, LA) – joined to form RelaDyne on November 8, 2010. The company’s innovative Field Reliability Management (FRM) platform of services is designed to enhance the operations of companies involved in process manufacturing, utilities, food and beverage processing, mining equipment and commercial fleets. RelaDyne also benefits from an exclusive relationship with Mansfield Oil and the support of its business building partner, Kidd & Company, who originally conceived the RelaDyne concept, and AEA Investors LP, which manages funds worth approximately $5 billion of invested and committed capital. For more information, visit www.RelaDyne.com.
About AEA Investors
AEA is one of the most experienced international private equity investment firms, founded in 1968 by the Rockefeller, Mellon, and Harriman family interests and S.G. Warburg & Co. as a private investment vehicle for a select group of industrial family offices with substantial assets. AEA’s active investors include a network of more than 70 highly successful business executives, industrial families and influential institutional investors. The firm manages funds that have approximately $5 billion of invested and committed capital. AEA has continued the operational and industrial orientation of its founders as it seeks investments in well-positioned businesses which can benefit from transformational capital to improve operationally, strategically and financially. This business building focus has allowed AEA to invest successfully over many economic cycles.
About Kidd & Company
Kidd & Company, LLC (KCO), is a Greenwich, CT based principal investment firm. Unlike most private equity firms, KCO’s investment model proactively identifies emerging or existing unmet customer needs. KCO invests its time and money to conduct the necessary research and to develop a transformational business strategy that provides a differentiated solution for these customer needs. Through this process, KCO’s goal is to create market-defining businesses that transform the basis of competition in an industry segment. This concentrated effort enables KCO to prove the value of the business idea before an investment is made. Through this work, the KCO investment model is designed to eliminate almost all of the risks associated with market acceptance of the strategy, thereby leaving execution risk as the primary barrier to substantial equity appreciation.