Working to define roles of CEOs, CFOs in private equity world

Indianapolis — The roles of the CEO and chief financial officer in a plastics world full of longtime owners, if new private equity partners step in, can take some work to define in the business.

"There can be a challenge in communications, because a lot of times with private equity, you're looking at a five- to seven-year window of ownership," said Glen Fish, CEO of injection molder Revere Plastic Systems LLC of Novi, Mich.

Fish and other executives addressed that topic at the 2019 Manufacturers Association of Plastics Processors' Benchmarking & Best Practices conference, Oct. 5-6 in Indianapolis.

Revere is owned by French private equity firm Ardian. The business has four additional plants including Clyde, Ohio; Jeffersonville, Ind.; Poplar Bluff, Mo.; and Brampton, Ontario, along with a sales office in St. Joseph, Mich. Revere employs around 1,150 and has annual sales estimated at $250 million.

Private equity owners "don't want to know what the company is doing minute to minute or day to day unless it affects results," Fish added. "But I enjoy it. It's fun, and we're looking for more acquisitions."

Michael Molling and Derrill Rice — executives with injection molder Plastic Components Inc. in Germantown, Wis. — said that those in the CEO and CFO roles have to be able to adapt to their surroundings.

Molling, PCI's CFO, said that compensation models for those jobs can vary, but often include pay for performance. CEOs and CFOs also have equity participation in some deals.

Rice, the CEO, added that "every situation is unique" and that understanding the expectations of the owners or founders "is critical."

"You have to know if they're investing for growth, lifestyle, generational reasons or something else," he said.

Firms also can be affected by not having a succession plan in place, according to Norm Forest, CEO of injection molder Dymotek Corp. in Ellington, Conn.

"You need a plan and a senior team in play," he said. "If not, people can say they're going to stay for another three to five years for 10 years."