Three of the largest industrial pipe, valve and fitting distributors have joined forces to create a $330-million distribution company, projected to be the fifth largest PVF wholesaler in the country. A name for the newly formed holding company had not been finalized as of press time.

The Bertsch Co. (Grand Rapids, Mich.), Mutual Manufacturing & Supply Co. (Cincinnati), and Piping and Equipment Co. (Conyers, Ga.) have among them more than 229 years of history in a 16-state territory stretching from the Canadian border to the Gulf of Mexico. The Bertsch Co. has 21 locations in Michigan and Wisconsin.

Mutual's 12 facilities serve the industrial and mechanical-contractor markets in Ohio, Kentucky and Indiana.

Piping and Equipment has 22 branches throughout the Southeast. (Piping and Equipment Inc., based in Houston, is not involved in the new organization.)

The following executive appointments have been announced by the group:

• John Bertsch, chief executive officer;
  
• Rick Waters, president, the new company?s Bertsch Division;
  
• Drew Barton, president, the Mutual Division;
  
• Rick Mousa, president, Piping & Equipment Division;
  
• Gary Blynt, vice president/finance;
  
• Craig Geers, vice president/purchasing;
  
• Tom Mueller, vice president/marketing;
  
• John Robinson, vice president/operations;
  
• Mark Patton, vice president/administration and integration;
  
• Chuck Chenevert, vice president/specialty sales.

Lowell Fambrough will retire from Piping and Equipment but will serve as a consultant to the new group. Jim Faulkner will continue to serve as vice president/operations and purchasing for the Piping & Equipment Division.

Strength in numbers

"We recognize the strategic changes that are happening in the industry now," Bertsch said. "We felt that combining these three strong regional independents would give us the opportunity to grow and compete better in our own regions and for larger regional -- and eventually national -- contracts."

Few operational changes are planned for the near future. The group's immediate goals are to take advantage of synergies that currently exist among vendors and customers of the three divisions, Bertsch said. However, he expects to eventually look for additional firms to expand the new company's geography. There are no plans to take the company public at this point, he added.

Barton said his interest in his company's new alliance with Bertsch and Piping and Equipment grew from his desire to associate with "the best of the best" in industrial PVF in neighboring regions. He pointed out that all three companies were about the same size, shared many of the same suppliers and had similar customer bases -- roughly half industrial accounts, half mechanical contractors.

"There's consolidation going on among our suppliers and our customers," he said. "All of us were getting requests from customers to take care of their plants outside our usual territory."

As a result, Barton said, Mutual formed alliances with other distributors to supply its customers' needs. However, such partnerships became more complicated logistically as the company faced serving plants farther from its traditional market and as industry consolidation continued.

"Furthermore, when you work through an alliance, you lose some of the control you need to meet the customer's expectations," he said.

Barton pointed out that similar mergers have occurred in other industries with good results, but it is a first for companies in the industrial PVF business. The fact that the companies' territories abut each other is key to the success of the venture.

"If you look at a map of the United States, you'd see that our combined regions cover all the states along Interstate 75 from Michigan through Florida," Barton said. "We consider those 16 states to be the industrial heartland of America."

He added that the group hopes to eventually add to that geographic area, although they have no specific plans to do so at the moment.

Taking the bull by the horns

One of the key concerns at Piping and Equipment was frequent rumors that the company had been bought or was about to be bought by one major competitor or another, Mousa said.

"Our customers and our employees were worried about that," he said. "We wanted to look at options involving companies with similar cultures to ours but that had no geographical overlap.

"We've worked with Bertsch and Mutual for different customers," Mousa pointed out, "and we've gotten to know them pretty well. So when we started looking for companies that were going in the same direction we were, they made sense.

"We've kept the three companies and the names intact," Mousa concluded. "We're going to do what we've always done, but we'll share best practices and see what we can learn from each other."