Materials handling news: Company execs weigh in on Intelligrated’s purchase of FKI Logistex segment
Strategic acquisition positions combined company as a leader in the materials handling industry.
Lorie King Rogers, Associate Editor -- Modern Materials Handling, 5/29/2009
After months of speculation, on Thursday, May 28, Intelligrated, announced it would purchase St. Louis-based FKI Logistex’ materials handling operations from Melrose plc, a manufacturing investment group headquartered in the UK. With this move, the new Intelligrated will become a leading materials handling systems provider to the warehouse, distribution, postal and consumer goods manufacturing markets.
Headquartered in Mason, Ohio, Intelligrated was formed in 2001. In that time, it has established itself as a player in the materials handling industry; and now it has significantly strengthened its presence as a result of purchasing the FKI Logistex enterprise.
As news of the acquisition works its way through the materials handling industry, top executives from Intelligrated and FKI sat down with Modern to share their insight and perspective on what this strategic merger means to their companies, customers and associates.
Modern spoke with:
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Christopher Cole, chief executive officer and co-founder of Intelligrated;
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James McCarthy, president, chief operating officer and co-founder of Intelligrated; and
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Stephen Ackerman, president of FKI Logistex, who is continuing in a senior leadership role in the combined company.
Company identity and products
First and foremost is the question of the new company’s identity. “The combined organization will go forward as Intelligrated, bringing together our own product offerings and all the FKI pieces that are part of its materials handling business segment,” explains Intelligrated’s McCarthy.
Intelligrated will maintain its Ohio headquarters and have sales offices and operations in 10 states including operations in Canada and Mexico, and manufacturing plants in Ohio, Missouri and Kentucky. Key systems operations will be located in California and Maryland.
The acquisition includes the rights to all products and services associated with FKI materials handling business segment, but not the right to use the FKI name. Therefore, while products will retain familiar brand names, like the Crisplant brand loop sorter, they will now carry the Intelligrated company name. As far as products and services are concerned, the company will continue to manufacture and support Alvey brand palletizers, Real Time Solution fulfillment systems, as well as others traditionally offered by Intelligrated and FKI Logistex.
While Intelligrated has been strong in the warehousing and distribution segment of the industry, FKI will enhance the company portfolio with its high-speed sortation, conveyor systems, palletizing, paperless pick products, automated storage and retrieval systems (AS/RS), controls, order fulfillment systems, RFID implementation, EDS integration, baggage handling systems, warehouse control systems, and total materials handling automation.
“In the past, Intelligrated and FKI were sometimes competitors,” says Intelligrated’s Cole. “As a result of the acquisition we can now offer our customers a broader suite of software solutions and even more sophisticated materials handling systems than we could as stand-alone companies.”
Geographic reach
The combined business creates an industry leader in automated materials handling systems and services, with the capability of providing a full range of mechanical and software solutions to customers around the world.
Intelligrated purchased FKI operations in North and South America, however, according to Intelligrated’s McCarthy, “We are not limited to the Americas. The company’s true focus is on the Americas, Canada and Mexico. By adding operations through this acquisition, we further enhance our capabilities to do business anywhere in the world and will look to do business beyond those reaches with very strategic partners.”
Customer benefits
For customers the news is all good. “Our customers will benefit first of all because we are an operating company in the materials handling business, not a financial holding company,” says Intelligrated’s Cole. “Our management team is completely engaged in the materials handling industry; we grew up in it; we’re part of it; and that’s our focus.”
FKI’s Ackerman welcomes the change. “We’re now owned by a company that wants to be in our business,” he says. “That leads to investment, which will in turn help to move us forward in the industry.”
As far as immediate business at hand for current customers, Cole says, “The center focus of our platform has always been customer service, and that won’t change. Customers get the best today from each company and the best of the best as we merge together into the future.”
Cole added that the companies respect the possible concerns of end users who have millions of dollars invested in products and relationships, and says there is no reason for concern. He says Intelligrated and FKI have a mutual goal of creating a seamless transition, blending the two organizations without so much as a hiccup. “Every message we’ve put out there is focused totally on the customer. We don’t anticipate any disruptions or any inadvertent changes to what customers have come to expect.”
“It’s very important for people to know that the contracts that are in place will be fulfilled, no questions asked,” says Ackerman. “In the future we will bring the strongest elements together to offer the best materials handling solutions.”
“When products do change, they will be enhanced for the end users’ benefit and customers will be offered the option of buying new and improved or staying with what they already own. We clearly recognize the massive investment customers have made in our products and we’re here to protect those investments,” explains Cole.
Associate benefits
Another key factor highlighted by the team is the opportunity for growth among the company’s associates. “We’ve been able to provide a lot of personal growth opportunities for our associates,” he says. “We’ve been a strong player, one that has demonstrated growth in an industry that’s experiencing flatness, and we anticipate more personal growth opportunities and responsibilities for our associates.”
Don’t forget about the suppliers. The team believes that suppliers now have an opportunity to come together and help Intelligrated grow even further by putting the best technology in front of customers.
“Overall,” Cole adds, “we have a great opportunity to enhance shareholder value and give a great return to the people who have invested in our company.”
Top 20 list
In the April 2009 issue of Modern, we ran our 12th annual Top 20 systems suppliers list, which included FKI Logistex in the No. 7 position, with 2008 revenue of $784 million. That figure, however, represented FKI’s worldwide revenue, and not just revenues in North and South America. Intelligrated missed the cut off, but reported $122 million in revenue. Without providing specific numbers, the trio told Modern that readers should expect to see the newly fortified Intelligrated high on next year’s list.
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