Sentry Equipment grows market share with acquisitions

Sentry Equipment Corp.

966 Blue Ribbon Circle North, Oconomowoc

Industry: Sampling equipment used in the power generation, food, chemical, pharmaceutical, oil and gas and related industries.

Employees: About 150

www.Sentry-equip.com

For the largest manufacturers and power plants, quality assurance and compliance with environmental standards are critical. Manufacturers need to know that the goods they are producing meet all safety standards, while power generation plants need to know that their facilities are operating within federal guidelines, but also that the water and steam that drive their turbines are within the tight tolerances of its machinery and systems.

Many of those industries turn to Oconomowoc-based Sentry Equipment Corp., a developer and manufacturer of equipment and systems that sample water, steam, gas, liquids, slurries and bulk solids. About two-thirds of Sentry Equipment’s sales are to the power generation industry, said Brian Baker, vice president and chief financial officer.

“We’re sampling steam and water in power plants,” he said. “The water and steam are turning the turbines, and they want them to have defined chemical properties. They don’t want to have impurities in there, which could ruin (very expensive) equipment.”

Sentry’s sampling units are used in natural gas, coal and nuclear power plants around the world.

The company’s units are also designed to analyze materials that are processed, things like foods, pharmaceuticals and oil and gas-related products. Sentry’s systems are designed to capture random samples of the entire product stream, allowing its clients to see an accurate sample.

“We call ourselves the sampling solution,” Baker said. “Our customers can come to us with a sampling issue and we can manufacture the equipment to do it. But it’s not just the equipment. We can develop a system that is a solution to their problem.”

Sentry Equipment is an employee owned company. Its employee stock ownership program, implemented in 1986, was one of the first in the state.

The company has about 150 employees. Roughly 130 of its workers are housed in its 60,000-square-foot Oconomowoc headquarters and manufacturing facility.

In the last nine months, Sentry Equipment has made three acquisitions. Last July, it acquired AquatiPro LLC, a Colorado-based company that services steam and water sampling equipment. Last November, Sentry acquired Zeck Systems LLC, a Texas-based firm that makes instruments used to inject scents into natural gas to give it a distinctive smell.

And in February, Sentry acquired Waters Equipment, a competitor that makes sampling equipment.

Waters Equipment has been folded into Sentry’s operations in Oconomowoc, while the Zeck and AquatiPro facilities in Texas and Colorado remain open.

The acquisition of AquatiPro has made Sentry Equipment the largest steam and water sampling company in the United States, Baker said.

“We had two competitors (before) and we acquired one of them,” he said. “We’ve got, probably, two-thirds of the U.S. market.”

The company also sells a significant amount, about 45 percent, of its equipment to foreign buyers, Baker said. Its foreign buyers are interested in water and steam sampling equipment for power plants and units for food, pharmaceutical, oil and gas and related markets.

Because of the diverse markets that it serves, Sentry Equipment was unaffected by the global economic slowdown. The company had record sales in 2009 and came close to repeating them in 2010, Baker said.

“We had about $30.5 million (in sales) in 2009,” he said. “And we’re on pace (in 2011) to do what we did in 2010.”

Two of the three acquisitions that Sentry Equipment made gave it entries into industries it hadn’t been in before. AquatiPro’s service capabilities will help the company deepen its connection with existing customers and create a touch point for new customers, Baker said.

And Zeck Systems gives it an entry to the natural gas market, where the company sees significant growth potential.

“There are huge resources (in the United States) and that’s a business we want to be in,” Baker said. “There are a lot of new natural gas power plants being built now. And there has been a lot of development in the field of (extracting) natural gas. That has been refined and is commercially viable now.”

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