Pelican Products sold to Behrman Capital for $200 million

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by MUHAMMED EL-HASAN

TORRANCE, California (27 Oct 2004) -- An investment firm has bought Pelican Products, the Torrance maker of flashlights, airtight and watertight equipment cases and other heavy-duty products, both companies said Tuesday.

Private equity investment firm Behrman Capital, based in New York and San Francisco, paid about $200 million for Pelican Products. The deal closed Friday after several months of talks that began around May, Behrman Capital managing partner Grant G. Behrman said from his New York office.

"We were extremely impressed with the outstanding financial performance of the business," Behrman said. "They are a market leader in the rapidly growing markets they're in."

Behrman Capital will help finance Pelican Products' continued growth, while keeping its management intact, Behrman said.

David H. Parker, who founded Pelican Products with his wife in 1975, will remain as the company's president and CEO.

"I'll have some great advice from the Behrman group," Parker said. "From an operational standpoint, I'll be doing exactly what I have been doing."

Parker ruled out cutting the company's 500-strong work force or reducing employee benefits.

"In fact, we're on a pretty ambitious hiring cycle," Parker said. "We plan to make this a totally seamless acquisition. There will be no changes."

Pelican Products will continue to make all of its products in Torrance, and has enough space to grow, Parker said. The Torrance firm also will move ahead with plans to open a sales office in Japan by January, Parker said.

Pelican Products generated revenues of about $80 million in the most recent fiscal year, and expects about $100 million in revenue for the current fiscal year, Behrman said.

Parker, 67, plans to retire in a few years and sought an exit strategy. Each week, he would receive about two inquiries from potential buyers. "In fact, I had two this morning," Parker said.

Pelican Products began with a list of its 38 most promising suitors, including General Electric Co. and Ford Motor Co., Parker said.

"We methodically boiled them down, and Behrman's head kept popping up," Parker said. "And we thought that was the best for us."

Parker was attracted to Behrman Capital because it only wanted to purchase Pelican Products rather than run it.

"We're doing a pretty good job, and we wanted to maintain that culture at Pelican," Parker said.

Parker started Pelican Products in 1975 with his wife, Arline, in their Torrance garage.

For the first few years, Parker also ran a home-based graphics business, while his wife worked as a flight attendant. Their first product was a diver's float, which originally was made from a hockey stick handle, string and metal weight.

Parker's previous exit strategy to pass the business on to his wife and son fell through. Arline died and their son, J.D., isn't interested in taking over the family business, Parker said.

"I had a wife of 40 years who passed away two years ago, and that kind of changed my plans," Parker said. "I had thought that she and my son would take over. But that's not to be."

http://www.cdnn.info/industry/i041027/i041027.html