For Pelican Products Inc., a Torrance maker of specialized carrying cases, a downturn in government business has proved to be a healthy turn of events.
Government agencies were among the largest customers for Pelican’s waterproof, bulletproof carrying cases, but with that spending down, the company has turned aggressively to the growing biopharma industry, developing products in-house and rolling up competitors.
Its most recent deal, completed in February, was the acquisition of U.K. temperature-controlled case maker and distributor Cool Logistics. With that deal, terms of which were not disclosed, the $330 million-a-year Pelican has doubled its capacity in the specialized space. The sale of temperature-controlled cases used by pharmaceutical and logistics companies to transport drugs, vaccines, blood and the like, now accounts for one-fifth of Pelican’s revenue. It was not even a business segment three years ago.
The addition of Cool Logistics came on the heels of Pelican’s purchase last year of Minnesota Thermal Science, a biopharma protective case maker in Plymouth. Cool Logistic is a worldwide exclusive distributor of MTS products.
“If you look at any of the large pharmaceutical companies, you’ll see they all have drugs that require temperature-controlled transportation,” said Dave Williams, vice president of strategic initiatives at Pelican.
Pelican will integrate Cool Logistics into its biopharma division, merging with MTS, which according to the company, will make the largest global footprint in the industry.
“We used MTS to accelerate our biopharma strategy domestically and Cool Logistics to accelerate our biopharma strategy internationally,” said Pelican Chief Executive Lyndon Faulkner.
“We would certainly be the company with the widest range of products and with the main service centers,” he said. “When you put that together, we’ve probably just become the company that these big global companies can come to for one-stop shopping.”
Matt Turlip, an analyst with New York research firm PrivCo, which specializes in privately held companies, said MTS has significantly increased Pelican’s customer base and distribution channels, and its engineering capability also will boost its parent.
“(Cool Logistics) is a strategic purchase as an add-on acquisition to help grow the biopharma strategy of Pelican due to the expanded opportunity in this area,” he said.
Internal, external growth
Pelican was founded in 1976 in Torrance by Dave Parker, a longtime scuba diver, who saw a need for waterproof and bulletproof cases and heavy-duty flashlights.
The company grew steadily, but had plateaued by the early 2000s. In 2004, Parker sold the company to private equity firm Behrman Capital of New York for $200 million. Behrman brought in Faulkner in 2006 to further grow the company internationally.
For reprint and licensing requests for this article, CLICK HERE.