Meghan Daniels Axial | September 5, 2018
In 1997, seven frustrated toolmakers banded together to launch Rapid Production Tooling, an injection mold tooling company based in Berthoud, CO. “The company where we all came from had just been sold to a different company and we didn’t like the outcome, so we left and started our own business,” says Clark Anderson, one of the seven original founders and president of Rapid Production Tooling.
Fast forward two decades and Rapid Production Tooling — now a 40 person company doing roughly $8 million in sales annually — began to explore an acquisition of its own. The business had been employee-owned since its founding, and its 20 shareholders were beginning to think about the next phase.
Based on their past experience, they knew they had to be careful about the type of acquirer they invited to the table.
Avoiding Past Mistakes
Rapid Production Tooling hired M&A advisory firm Generational Equity to help them run a process, and entertained a half dozen offers from corporate acquirers and private equity.
Twenty years ago, Clark and his partners had seen exactly how an acquisition could go wrong. “Our previous company was purchased basically to help our acquirer’s supply chain and capacity. They thought they knew what they were doing and they came in and tried to change things about our business that ultimately did not work well. The respect for the people on the floor was not there,” says Clark.
This experience was top of mind when evaluating potential acquirers. Ultimately, R.L. Hudson, a custom injection molding company, rose to the top. “It wasn’t just because of their financial offer, but also their way of doing business. R.L. Hudson needed our expertise and we felt very strongly that they would be a good match for us,” says Clark. “They had always purchased tools before and never built any tools themselves. They were not looking to come in and change our way of doing things as much as they needed to learn our ways of doing things to help their business.”
Based in Broken Arrow, OK, R.L. Hudson manufacturers custom rubber parts and molded plastic components. The company, which currently has about 110 people employees and annual sales of $55 million, found Rapid Production Tooling on Axial. The deal closed in July and was the first acquisition R.L. Hudson has made in its 35 years.
“We’ve been expanding our own manufacturing capabilities in the plastic molding injection area, and were looking for an acquisition in the molding or tooling side,” says Rick Von Drehle, president and CEO at R.L. Hudson.
Mutual Respect
R.L. Hudson was excited about Rapid Production Tooling’s technical capabilities, but also saw them as a good cultural fit. “They’ve got a really fantastic team that works together well and they’re very people-centered in the way their senior managers manage the organization, as we try to be,” says Rick. “They are also very customer-centric — they have deep and longstanding relationships with their customers and provide just phenomenal quality products delivered on time.”
This sense of mutual respect helped the deal move swiftly — from LOI to close took only 60 days. It has also helped the integration process run smoothly so far. “There was a lot of concern among employees at first, not only because of the failed takeover 20 years ago but also because there was another failed takeover of a similar business in our area a couple years ago,” says Clark.
The management teams at both Rapid Production Tooling and R.L. Hudson have prioritized communication to help manage any anxieties that arise. “We all wanted to make sure everyone on our team understood that we’re here to help [R.L. Hudson] as much as they’re here to help us,” says Clark. “That’s gone a long ways toward alleviating any fears among our employees because they’ve seen that they’re needed and their opinions are respected.”
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