Worthington Industries acquires Palmer Manufacturing
By RUTH CAMPBELL
By RUTH CAMPBELL
Worthington Industries Inc. announced Wednesday that its pressure cylinders segment has acquired Palmer Manufacturing & Tank Inc. of Garden City.
Palmer Manufacturing, which employs approximately 200 people, makes steel and fiberglass tanks and processing equipment for the oil and gas industry, and custom manufactured fiberglass tanks for agricultural, chemical and general industrial applications.
"We are very excited to add the capabilities of Palmer to further the growth in pressure cylinders," Andrew Billman, president of the business segment of Worthington, said in a press release.
"The Palmer business strengthens our energy position and fits our strategy to geographically expand in the oil and gas industry. When combined with our alternative fuel cylinder business and our entry into the cryogenics arena, we are broadening our energy product offerings." Billman said. "This strategy allows us to participate in the expanding North American oil and gas markets, as well as global growth in alternatives for gas and diesel to power vehicles, which include compressed natural gas, liquefied natural gas, autogas (propane) and hydrogen."
Palmer manufactures steel and fiberglass tanks in a range of sizes and is strategically located to serve the Bakken formation in North Dakota, the Uinta and Denver-Julesburg basins, along with several of the shale formations in northern Texas, according to Worthington. Palmer was founded in 1971 and has 184,000 square feet of manufacturing space at its Garden City headquarters. The privately owned company generated $70 million in sales in the fiscal year that ended June 30, 2012, according to the release.
Worthington Vice President of Corporate Communications Cathy M. Lyttle said the Palmer acquisition had been in the works for several months.
"Worthington continues to pursue new markets that are accelerating our growth," said John McConnell, chairman and CEO. "The acquisition of the Palmer business, together with our recent acquisition of Westerman, gives us a strong footprint in the oil and gas industry. This high-value added manufacturing business complements our existing capabilities and should generate strong commercial synergies."
Lyttle said the acquisition is seen as a chance to expand Worthington's business and the employment base.
Cecil O'Brate, owner of Palmer Manufacturing, said the sale, finalized Tuesday, proved an attractive deal.
"They're very interested in expanding the operations and they're very, very good to their people, and that was one of my big concerns. These people have been my family for 47 years," O'Brate said.
The Palmer facility at 2814 W. Buffalo Jones Ave., will continue to be used.
"Nothing will move. Every employee is going to keep their job. They're going to try and hire more people," O'Brate said, adding that a second shift will be added.
Worthington also will continue to support the community.
"They support the community wherever they're at. They know I support (it), and they'll continue to support it. As far as economic growth, they intend to double the productivity, so that will be good for the city," O'Brate said.
Asked if he would miss owning the company, O'Brate said, "After 47 years, it's like selling one of my kids."
According to the release, Worthington, a diversified metals manufacturing company, had $2.5 billion in sales in fiscal year 2012.
It has 10,000 employees, including more than 5,000 workers in its pressure cylinders segment worldwide. About 4,000 of those employees are in North America, and the remainder in Slupsk, Poland, Visakhapatnam, India, Kienberg, Austria and Hustopece, Czech Republic, Lyttle said. Worthington acquired Westerman in Breman, Ohio, in September 2012.
Westerman makes tanks and pressure vessels for the oil and gas, nuclear and marine markets, according to an article on Worthington's website. The purchase price was $70 million, of which approximately $6 million went to pay down Westerman debt, the article said.