CHICAGO – With this week’s International Casual Furnishings Association (ICFA) Casual Market show in Chicago, and last week’s acquisition of Tropitone, it’s safe to say that Gene Moriarty, president and CEO of Brown Jordan International Inc, has not had much down time.
The Brown Jordan / Tropitone transaction combines leading providers into a company generating consolidated net sales of nearly $400 million. The combined company will be headquartered in St. Augustine, Fla, and will maintain manufacturing, design and administrative operations in six states in the US, as well as in Juarez, Mexico.
Despite a hectic ICFA schedule, Moriarty took some time to chat with Patio & Hearth Products Report (P&HPR) and answer additional questions about the direction of both companies going forward.
P&HPR: What has been the reaction to the acquisition at this week’s ICFA show?
Gene Moriarty, president and CEO, Brown Jordan International Inc: Reaction has been positive. We addressed the Tropitone management team and selling organization on Monday, and gave them reasons why we bought the company, and what our strategy was going to be.
We own a number of portfolio companies, and each of those companies run on their own. We don’t envision making any changes to the way Tropitone goes to market or designs and sells products. Once that was out in the open, the reaction from sales representatives and the management team was extremely positive.
P&HPR: In what ways can you help Tropitone?
Moriarty: Tropitone is a complementary business, and clearly one of the great brand names in the consumer and commercial channels. We think there are things we can help. Our scale allows for improvements on sourcing and manufacturing. We can get improvements on lead times for products that they currently source that we might be able to make in Mexico, as an example, and that will only benefit customers.
There are balance sheet types things that can be done in terms of the scale of the companies being put together—that is where our value is going to be in this. As it relates to their strategic direction—their ability to design products, and address the market—we are going to let them drive that just as we have with our other businesses.
P&HPR: Do you anticipate any job loss associated with the acquisition?
Moriarty: That’s not one of the reasons we bought it by any means. We don’t think this business [Tropitone] is in need of any kinds of major cost-cutting initiatives. It is a well-run business. It’s a profitable business. It has had great leadership, and it has solid people across the major functions. We like the business for its growth potential, and that’s really why we bought it.
P&HPR: Why Tropitone?
Moriarty: We looked at a number of businesses to buy, and what we liked about Tropitone was its great brand name and its heritage. They look at the business very similar to the way we do. They are very disciplined and strong in the key functions of operations, sales, product development, and manufacturing. Those were all extremely complementary to the way we do things.
P&HPR: Why now?
Moriarty: One of the things we have been really successful with, post recession, is putting ourselves in a position where we don’t have a lot of debt. We have been able to utilize our cash, and some debt in this deal, to be able to purchase a company like Tropitone. We think Tropitone is clearly in a growth mode, and we want to accelerate that growth by providing them with a better balance sheet, as opposed to what they could have done as a single entity. This purchase was very much about growth—growth of our company and growth in theirs.
The transaction marks a year of celebration for both companies, as Brown Jordan’s flagship brand prepares for its 70th anniversary and Tropitone enjoys 60 years in business. Both companies are presenting their 2015 lines at this week’s ICFA show, scheduled for Sept 16-19.