By Eric Peterson / CompanyWeek | May 16, 2023
Meridian Adhesives Group has stuck to a strategy of strength in numbers since its beginnings. "Meridian was formed in 2018 when Arsenal Capital Partners wanted to start building this group of high-performing, specialty adhesive companies," says Bland. "The business I was working in at the time was actually the first company acquired, which is Adhesives Technology Corporation [ATC]." Based in Pompano Beach, Florida, ATC was Meridian's first acquisition in the adhesives sector in 2020, and Bland's employer since 2014.
"From the equity holder's perspective, it's a space that they saw as being high-value but also pretty fragmented -- there's an opportunity to really take a leadership position in the space," says Bland of the strategy. "When you acquire several companies, you get to accelerate the process of best practices adoption. If you're a single company, you learn them organically over time, but if you're acquiring companies that are successful and then you're putting them together, very rapidly you get to take advantage of the extra scale, purchasing power, and all of those things, but you also get technology benefits, which can save years or decades versus organic growth."
More acquisitions followed, including Utah-based Convergent Concrete Technologies in 2021. "Over a period of four years, we purchased 16 companies and built it into three divisions," says Bland. "We transitioned the business last year to American Securities, which holds it now, and we've already acquired one company since then."
Meridian now has three divisions: Infrastructure, Electronics, and Industrial. Industrial encompasses three subdivisions: Flooring, Packaging, and Product Assembly.
The cross-pollination of ideas within Meridian's broad and deep knowledge base on all things adhesives is a catalyst for innovation across the portfolio. "Having all these different companies with all these different backgrounds and experiences, it can add instant value," says Bland.
It also allows for a more efficient operation by allowing for each company in the portfolio to focus on its manufacturing forte. Explains Bland: "Sometimes you end up selling things because you need to offer a full line, but it may not necessarily be your point of manufacturing expertise. You're either sourcing them from a third party or you're doing something that's low volume in a very manual way, whereas when you acquire companies with different manufacturing expertise, we've been able to put the product in the plant where the scale is right."
Meridian's portfolio encompasses more than 20 manufacturing sites in all. Beyond the Houston headquarters, the company manufactures flooring adhesives in Alvarado, Texas.
Meridian's strategy has catalyzed growth from coast to coast. "We continue to outperform the market pretty sizably," says Bland, noting that expansions at facilities in Florida and Utah will catalyze more growth in 2023 and beyond. "We've enjoyed significant year-over-year growth, market share growth, and there's plenty of runway left."
Challenges: "Supply chain continues to be a challenge, but it's less tied to chemicals and more tied to packaging accessories and products," says Bland. "At one time, I would have said total labor was a challenge, but right now, I would say finding the right skilled labor to grow is challenging, and in some cases, we're having to say, 'How can we improve training programs internally so we can impart the skills needed?' There's people who want to work, but they haven't done this kind of work before, and Meridian is willing to invest in its workforce."
Opportunities: Supplying increasingly large and global companies. "As your customers get larger and more complex, they expect the same out of their suppliers," says Bland. "So as a supplier, the more capability you have, the more of a customer's needs you can fill, you're sitting in a good position when they look to consolidate suppliers. It's the smaller suppliers that only have one product line or don't have global reach or even national reach, those suppliers sometimes end up on the bad side of that coin during consolidation, and that's an area where we grow."
Needs: Bland sees a need to forecast where to scale production capacity across the Meridian portfolio. "We just don't see any letup with the demand," says Bland. "If you just look at the macros, the fundamentals are solid. And if the fundamentals are good, then what we've forced ourselves to do is to say not, 'Where do we want to be next year?' but 'Where do we want to be five to 10 years from now?' and make sure that we're preparing for that today."