BY BEN JACKLET
When I interviewed Blount International CEO Josh Collins a year ago, he offered a clear strategy for growing sales from $487 million in 2009 to approximately $920 million in 2014. He may hit his goals sooner than planned after Blount's purchase Wednesday of Illinois-based farm equipment manufacturer Woods Equipment for $185 million.
Indeed, Blount seems well on its way to joining Esco Corp. in the next wave of Portland-based industrial powerhouses to top a billion dollars in annual revenues and keep growing, in the manner of Schnitzer Steel and Precision Castparts.
Blount increased sales by 39% in the second quarter to $201 million and upgraded its outlook for the remainder of 2011 based on strong sales and an upsizing of its credit facility. Woods Equipment was its second acquisition of the month. Even with all of the recent market mayhem, Blount's stock has risen 38% over the past year. Not bad for an old-school business that makes things like saw chain, lawn mower blades and log splitters.
An ex-Marine who went from Desert Storm to Harvard to Wall Street, Collins took over a company on the edge of the abyss when he became CEO of Blount in January of 2010. He initiated a full strategic review, set ambitious five-year goals and began implementing initiatives to achieve those goals. One key element of the strategy: acquisitions.
In August of 2010 Blount bought farm equipment maker SpeeCo for $90 million. A year later, it is purchasing a similar company about twice as large. As is the case with Schnitzer and Precision Castparts, Blount is determined to eat rather than be eaten. All three of these Portland companies are run by finance-savvy, hard-charging take-over specialists: Tamara Lundgren at Schnitzer, Mark Donegan at Precision Castparts, and Collins at Blount. Between them they have bought dozens of companies in recent years. Mining parts manufacturer Esco has also adopted more aggressive business tactics in recent months, filing for an initial public offering in May and acquiring Hydra Mining Tools International of the United Kingdom in July.
In somewhat related (and somewhat surprising) news, the Russian steelmaker Evraz recently announced plans to expand its Portland operation significantly, more than doubling its pipe-making capacity.
So what is the conclusion to be drawn from all of these acquisitions and expansions by Portland-based industrial manufacturers? It would seem to me that reports of the death of Oregon's manufacturing sector have been greatly exaggerated.
For all of the hype about the unlimited potential of the digital frontier, someone still needs to make steel and pipes and blades: physical things for the physical world. And not (quite) everything is being built in China. The new product that Collins calls the "Holy Grail of saw chain," a self-sharpening system for chainsaws, was developed and built here in Portland. Blount employs more than 1,500 people in the Portland area. The company added 400 jobs in 2010, about half of them in Oregon.
Ben Jacklet is managing editor of Oregon Business.