Larry Fulton has been a business owner for the past 15 years, but what he really wants is to run a portfolio of small companies in the Cleveland area.
This January, Fulton took a step toward that goal, buying custom fiberglass product maker Hanlon Industries in Euclid, Ohio, and renaming it Hanlon Composites LLC.
Fulton has been looking for an acquisition for a while. At first, he was searching for an add-on acquisition to his existing business, custom crate maker Lefco Worthington LLC in Cleveland, but he broadened his search after coming up short in that space.
He wanted a company with a repeat customer base, consistent financials and ownership without a firm succession plan. In addition, he wanted the product to be low-tech but not easily duplicated, like the one he makes at Lefco.
"And this particular business, excluding the turnaround aspect, checked off all those boxes," Fulton said of Hanlon, where he's now president.
Hanlon Industries had been around for about 60 years, Fulton said. The company serves a variety of industries including industrial transportation and utilities. Fulton declined to share annual sales, but said it was less than $5 million.
Richard Senn, president of RNJ & Associates Inc. in Mentor, Ohio, represented the Hanlons in the sale. The prior owners were older, Senn said, and the business needed some "new blood." The business had been for sale for about six months and had gone through two other potential buyers before Fulton started the acquisition process.
Whenever the city has a company with a long-term owner looking to sell, this is the type of transaction it hopes for, said Jonathan Holody, director of planning and development for the city of Euclid. In his first few months, Fulton has already made improvements to the property and is looking to grow employment.
Fulton is "breathing some fresh life into the business," Holody said.
At the time of the purchase, Hanlon had five employees. Fulton has already grown that to 15. Much of his focus so far has been on making sure current customers' needs are met and training new and existing employees. The company had two main lines of business — a more standardized press operation and a more customizable, manual operation. Hanlon had developed deep capabilities over the years, but employees needed to be retrained to offer more, Fulton said. The company now also offers a spray line, similar to its hand-laid products, and it's looking to develop more capabilities.
"We're really trying to redevelop our capacity and capability as a business," Fulton said.
He has purchased new assets, including a tow motor, updated the lighting and ventilation in the factory and redeveloped the press equipment in the plant. The molds and dies have been cleaned, and a space was built to better organize tools. The office has also been redesigned. In total, the Euclid facility — Hanlon's sole space — is about 12,000 square feet. Fulton declined to share the price of the acquisition or his total renovation investment, but said combined, the cost is in the hundreds of thousands of dollars.
About four months after the acquisition, Fulton said the turnaround portion of the business plan is reaching its end, and he's now focused on growth. He needs to make sure that growth is sustainable, particularly with a largely new staff, but he is looking for new opportunities as the company has a lot of open capacity. And he'd like to see employment at Hanlon grow to 25 to 30 in the next two to three years.
He's still running Lefco Worthington as a separate entity, but most of his time is spent at Hanlon Composites. Ideally, he'd like to develop a strong management team at Hanlon, like he has at Lefco, and turn his attention to a new acquisition to continue building his portfolio. His goal is to build up a portfolio of 10 to 15 manufacturing and service companies in the region.