Charlotte CEO details expansion plans, $100 million acquisitions for manufacturing firm

Charlotte manufacturing firm SPX Flow made two pricey acquisitions this year to help cement its growth plans, CEO Marc Michael recently told the Observer.

SPX Flow manufactures equipment like pumps, valves and filtration systems for such customers as Unilever, Abbot, Basf and Hyundai.

In Michael’s 18 years with the company, the last five as CEO, he’s seen it transform from an automotive business making piston rings to a multinational industrial portfolio conglomerate.

Headquartered in Ballantyne, SPX Flow spent $65 million last month to purchase Philadelphia Mixing Solutions from Thunder Basin Corp., and in January, bought UTG Mixing Group for $41 million.

And last August, SPX Flow purchased North Dakota-based Posi Lock, maker of hydraulic and mechanical pullers, for $10 million.

Over the past five years, Michael said SPX Flow focused on being a process solutions company. SPX Flow develops mixing and blending solutions to meet customer needs. “We started seeing that strategy really starting to play out during the pandemic,” he said.

The Philadelphia Mixing Solutions acquisition is a critical part of the company’s plan, Michael said, for mixing and blending solutions for food and beverage, pharmaceutical and industrial process applications.

Last spring, the company shed its power and energy segment for $400 million. Michael said that put the company in a strong financial position going into the pandemic.

SPX Flow saw last year’s revenue drop by 10%, from $1.51 billion in 2019 to $1.35 billion.

But its first quarter earnings last month showed 20% growth year over year of nearly $364 million, compared to almost $290 million last year. Operating income nearly tripled, from nearly $26 million this year compared to $9 million last year.

“We’re now a very stable company positioned to grow,” Michael said.

Now its focus is on nutrition and health, and industrial markets, with customers in food and beverage, pharmaceuticals, and water, chemicals and mining. Five years ago, SPX Flow was formed when parent company SPX Corp. spun it off to be a separate company.

RBC Capital analyst Deane Dray said in February that SPX Flow appears to be emerging from the pandemic recession better positioned than when it went in, with revenue and earnings posting higher than expected in the fourth quarter and early signs of a recovery in its industrial markets.

Pandemic solutions

The company’s new tagline rolled out last month: “Solutions in the Making.” Michael said it’s indicative of the spirit of the company and how SPX Flow adapted during the coronavirus pandemic.

SPX Flow helped customers make hand sanitizers and paper products, and even toilet paper, in the industrial sectors, as well as equipment to help manufacture the COVID-19 vaccine, Michael said.

SPX Flow learned during the pandemic that its products across personal health and industrial were essential. The company got creative helping customers, such as providing hats with cameras so technicians could walk them through issues.

“We not only provide equipment to customers, we also solved process problems,” Michael said.

SPX Flow also focused on employee health and safety, offering employees paid time off in quarantine, for example. Michael said the company is encouraging workers to get vaccinated but not requiring it. SPX Flow has about 5,000 employees in more than 30 countries, including about 200 in Charlotte.

Employee mental health also has been a focus, with executives reading books to children virtually and even hosting virtual escape rooms. As outbreaks occurred, then reappeared in place like in India, factory shifts were staggered, team meetings were held online and safety protocols like masks, social distancing and health screenings were put in practice.

There are about 15 manufacturing sites in Asia, Europe and throughout the U.S., although none are in North Carolina.

Michael also expects SPX Flow will have more work schedule flexibility going forward so employees can balance home and office life. “We’ve got the capability to do that now,” he said.

On the horizon

Michael expects SPX Flow to have $1 billion in capital over the next three years, using half of that for mergers and acquisitions. Other funds will go toward modernizing factories and digital growth.

And, the company is investing in improving its company culture.

Last month, SPX Flow hired Dori Armstead as its first chief diversity officer to foster an inclusive workplace and community relations.

Last year, the company launched an employee resource group for mentoring and networking. And two years ago, SPX Flow started a group called Empower to support and encourage women.

The company also offers Friday mental health days, encourages community service and even has a listening hour with Michael himself and other executives.

“We’re taking the opportunity to listen to what’s important to them,” Michael said. “We want to improve on our culture of belonging.”

This story was originally published June 3, 2021 at 6:30 AM.