Milwaukee-based IGC Technologies LLC experienced 52-percent revenue growth in 2010 and expects 5- to 6-percent growth in 2011, which is why it appeared valuable for a strategic acquisition this year by one of its suppliers.
“The diversification that we initiated helped us in 2010 to really create extraordinary results,” said former IGC chief executive officer Ralf Schönfelder.
New York-based Prince Minerals Inc. purchased IGC for an undisclosed amount in a deal completed Aug. 29. The research and development headquarters for Prince Metals’ new metallurgical division will be in Milwaukee.
IGC produces an additive used in metal casting. Prince Minerals processes minerals, additives and colorants used in making bricks, cement, glass and metals.
Prince Minerals has been supplying minerals used to make products at IGC for several years, said Schönfelder, who now serves as managing director for Prince’s newly formed global metallurgical division.
“We are a perfect strategic fit,” he said. “We felt that we have developed significant value throughout the years, through the recession and afterward.”
The combined companies will have improved efficiencies and a broader portfolio of products, since they are complementary, Schönfelder said.
Prior to the acquisition, IGC Technologies focused its energies on core competencies – powder blending, material science and material handling – while expanding its geographic reach.
“The secret of success really for us was to keep diversifying even in difficult times,” Schönfelder said. “The secret was really money well spent on revenue related issues.”
IGC was purchased by Brass Ring Capital Management in 2006, and began international market expansion at that time, Schönfelder said. IGC’s exports grew from 2 to 3 percent of its business to 25 percent when Brass Ring sold the company to Prince Minerals.
The key to being successful in foreign markets was linking up with the right partners to sell the company’s products elsewhere, Schönfelder said.
“The value and the functionality has to be explained to the customers,” he said.
While IGC was hit hard by the Great Recession as a large number of automotive customers cut back on orders, the company recovered strongly.
There were a few layoffs during the recession, but IGC is now back to its previous 22 employees, who have joined Prince’s 159 employees in the United States.
The company’s streamlined, market-focused, innovation driven strategy has helped contribute to its growth, with an emphasis on research and development and creating new markets, Schönfelder said.