HBM’s Acquisition of Aerofil Highlights Importance of Talent Development and Long-Term Commitment

Aerofil Technology, Inc., a leading contract manufacturer that fills aerosol and liquid containers for industry-leading brands, was acquired by HBM Holdings on September 29, 2017.  Although the acquisition was recent, Aerofil has quickly benefitted from the financial and talent-based support HBM provides to its portfolio companies.

When HBM acquires a company, we look to hold it indefinitely, adding consistent value over time.  We seek businesses that will benefit from a capital plan over a five, ten or even twenty-year time horizon.  We enjoy partnering with family owners to build upon their past success.  Our investment philosophy is differentiated from a private equity firm; in fact, we are not a private equity firm.  In addition to providing capital to our companies, we leverage our enterprise-wide resources in talent management, technology and operational acumen to assist our portfolio companies in executing long-term strategic plans.

Founded in 1988, Aerofil Technology has emerged as a leader in the aerosol filling manufacturing industry.  Since opening their doors, Aerofil has fostered a culture focused on employee development and taking good care of customers.  Their commitment to these ideals has not gone unnoticed. Aerofil was named “Supplier of the Year” by 3M and holds rank as one of the St. Louis Business Journal’s Top 150 Privately-Owned Companies.

Aerofil’s culture, strong customer base and world-class manufacturing practices made the company an attractive acquisition candidate.  We saw tremendous value in acquiring Aerofil and quickly identified how the company could benefit from our enterprise-wide solutions and capital resources.

We think about filling top management positions the same way we build our portfolio – with a long-term, enterprise-wide perspective. With his strong global management experience, Daniel Wright, HBM’s Vice President of Corporate Development, was a natural fit for Aerofil’s President and COO role. Daniel took on the new role without missing a step and is bringing HBM’s values and operating practices to help Aerofil further accelerate growth.

Before joining HBM, Daniel was responsible for a public company business unit with operations on three continents and sales on five continents.

“When I joined HBM, their focus was on my commercial and operational experience and less on my deal experience,” explained Daniel. “HBM’s vision from day one was for me to eventually move into a portfolio company.  HBM’s model is unique in that it develops talent in a series of steps and progressions.  My placement at Aerofil is a good example of how HBM thinks about developing its businesses while maintaining a strong focus on talent development.”

A unique component of our investment approach is that we quickly integrate ourselves with the management teams of our companies.  We are focused on supporting and enabling as opposed to controlling and demanding.  We get up to speed quickly and provide resources to our companies to accelerate the execution of their strategic plan.  In Aerofil’s case, we were able to approve capital support within the first two months of the acquisition.

Bob Dunaway, CEO of Aerofil, in a discussion with the St. Louis Business Journal, explained that his company experienced a solid 15% increase in revenue in 2016.  Business was strong and operating at full capacity. However, Bob knew the company needed to invest in two new aerosol lines.  Unfortunately, the timing and circumstances were not right for Aerofil to make such a large investment.  With the completion of the acquisition, Bob and the Aerofil team had the full financial support of HBM and quickly invested in the two new aerosol lines.  Now revenues are projected to increase 20- 30% in 2018.

Our integration process allows us to make quick and informed decisions.  An on-site integration manager is appointed to each of our newly acquired companies and is a critical success factor to seamless integration.  The integration manager serves as a clearinghouse for managing workstreams and improving processes and capabilities.

We are proud of Aerofil’s success—with similar successes mirrored across our portfolio. Moreover, we are even prouder of our culture and people—like Bob and Daniel—helping us build great businesses.