We sat down with Dave Baker, General Manager of Climax, to talk about the portable machining business.
Please excuse any typos in this hasty transcript.
Matt Register: Hey guys, welcome back to the show, Texas Business Radio. Texasbusinessradio.com is the web site. We’re down here at the George R. Brown Convention Center in Houston, Texas, beautiful Houston, Texas. At the 2017 Valve World Americas. We’re learning about valves. We’re learning about all of the different industries those valves go into and the companies that service those industries. And we’ve had some very fascinating conversations last week and then again this week we’re continuing that conversation. Guys, go ahead and get your calls in 844-814-8144 is our 24 hour call in line. 24 hours, that means call us now, call us at 3 o’clock in the morning. I don’t really care. We’re going to get the experts on here to get those questions answered. Also Texasbusinessradio.com you can see the entire thing in beautiful high definition video. And you can get your questions in that way. A lot of ways to get in touch with us. Go ahead and get in touch with us. Get your questions in. I’m your host Matt Register, here as always with my co-host Jay Curry. Jay what’s going on?
Jay Curry: I’m pretty excited about Dave’s story because it involves private equity and how you expand your business, grow your business different states. It’s going to be a real good one. And what a show this has been fun.
Matt Register: Yeah. No doubt. You know guys, we talk to you about, you know, as a middle market business owner there’s several ways you can exit your company. One of them is through private equity. We have here Dave Baker, who’s general manager of one of the companies, of, for Climax. Which is a private equity owned company that has ended up purchasing several companies. One of which, here in Houston, that is, that is a valve company. But you guys are able to bring a lot more to bear from this location. You know, bring a lot more services to them and allow them to expand greatly what they are doing, because you do so many things. So I want to introduce Dave Baker. Dave welcome to the show sir.
Dave Baker: Thanks. Good to be here.
Matt Register: So talk to me about Climax. What do you do? Who do you do it to?
Dave Baker: So, Climax has been around for roughly 50 years. A gentleman by the name of Paul Straight in 1965 invented a portable key mill that they used in sawmills in Oregon. And that tool was able to go on site and cut key ways. And word got out that it was saving the plant so much downtime or the saw mill so much downtime, in some cases as much as three days. That he opened up a machine shop and Climax was born. And since then we built a portfolio of portable machining equipment from pipe cutting and beveling, flange facing, line boring equipment, portable lays, on down the line. And we’ve established ourselves as the number one company in portable machining.
Matt Register: Well and tell you what, being a machine shop guy, in my background. I can appreciate that because most of the time to do repair, to do anything that requires machining, you have to take a piece of machinery, a piece of equipment from a plant, wherever it’s operating, disassemble, transport it to a machine shop, disassemble it some more and then you get a chance to do, to machine on it. Now this is an opportunity, where right there on the plant floor you have the ability to come in and line bore things, drill holes, do whatever it is you need to do, right there on, on the plant floor. And that saves a tremendous amount of time, a tremendous amount of expense. So, I mean I find that fascinating. How, what kind of industries are you guys finding this useful for?
Dave Baker: So it’s applicable in all kinds of different industries from oil and gas, a lot of our equipment will be used on site in refineries, petrochemicals facilities, heavy construction and mining. You’ve got these big mining trucks and what have you. You know it’s much easier to take our equipment and service these trucks on site as opposed to, like you said, logistically disassembling them and moving them off site to do the work there in hopes that it meets the spec when you bring it back on site. So, power-gen, nuclear, shipbuilding applications, there’s tons of different applications for this, this type of equipment.
Matt Register: Now you guys operate the equipment and rent the equipment is that accurate?
Dave Baker: So, that, that’s actually not accurate.
Matt Register: OK.
Dave Baker: A lot of manufacturers of portable machining equipment actually do onsite work. We’ve chosen to take a different path. We consider ourselves a pure play, meaning we will not compete against the customers that we’re selling our equipment to. So all of our, all of our resources, all of our energy goes into supporting the equipment itself, rather than actually using it on site.
Matt Register: All right. Got it. So you’re selling the equipment, you’re renting the equipment to the guys, to the operators that are actually going on site and the contractors that are going in with plants to, to actually do it. Now you guys have fairly recently purchased a company here in Houston. Tell me a little bit about Calder Testers, because I was familiar with the company from before. But tell me a little bit about why you chose to purchase that company and what kind of addition that’s done to your product offering.
Dave Baker: Yeah. So there’s, there’s a few reasons why Calder was a very attractive opportunity for us. And one, we do manufacture portable valve lapping and grinding equipment. So very, very much entrenched in the valve and oil and gas industries. Calder Tester’s what they do is they manufacture valve testing equipment. So anyone that’s in the valve refurbishment business, if they’re doing work on valves, refurbishing or machining on valves, before those valves get, get re, put back into service, they need to be tested. And what we recognize with the valve testing market was, is there was a big gap in that market for really two things that really serves climaxes interest very well as the number one player in quality in our industry. The number one player in customer service in our industry. And we really felt like there was a good opportunity in the valve testing market to do this and with Calder. And Calder has a very good reputation, it’s name, specifically in North America…
Matt Register: Sure.
Dave Baker: That we were able to take that brand, add our Climax touch to it and then expand that brand globally. Which is what we’ve really begun to do.
Matt Register: Well and not only that, not only can you expand the offerings that Calder had here in Houston and expand it to your other operations. You can now take the other operations you were doing elsewhere and be able to offer it very specifically here in a market that should be a very viable market for you here on the Texas Gulf Coast. Right?
Dave Baker: Right. And that was, that was the other attractive thing about Calder is it, this really became the introduction to Climax into the market. It gave us the ability to now sell and rent our products directly. So we, we took Calder, we actually opened up a new facility in Deer Park. We now have the largest rental fleet, that we have in the globe, positioned there in Deer Park. And we’re, we’re selling, renting and training and providing technical support for all of our brands, now in Houston directly. And then me, myself, personally, I made the decision to move down here in July of last year from Portland, Oregon. As an officer of the company, this is where, where, where the business is and so this is where as me, one of the heads of our commercial operation, it made a whole lot of sense for me to come down here and interface with customers.
Jay Curry: Well, we’re a little biased but we think that was a very smart move. If you want to get to the customer, you need to come to Texas.
Dave Baker: Yeah.
Jay Curry: So, how long ago was it, that you made that acquisition? Because you guys really done some stuff.
Dave Baker: So that was in 2013 that we acquired…
Jay Curry: Still, only four years.
Dave Baker: Only four years. And you know, most recently we, we completely re-enhanced and re-engineered the whole portfolio of Calder products. And that’s really what we’re showcasing here at the Valve World International Show, is, we’ve retooled the whole line and we really feel like we’ve got the best value testing line up in, in, in the world, right now.
Matt Register: All right guys, we’re talking to Dave Baker, who’s the V.P. of Sales and Marketing for Climax. Dave I want to thank you very much for joining us. What is the easiest way for somebody to get in touch with you, should somebody want to.
Dave Baker: So you can either get in touch with us with, from our 800 line or if you’re in, you’re in Texas you can call us directly at, well, 7, 7 1… You got my card. 713-333-0260. That’s our, that’s our direct line or our 800 number which is 1 800… Oh, I don’t have that on there do I?
Matt Register: Yeah. No. That’s alright.
Jay Curry: Web site or just…
Matt Register: We also, yeah, climaxportable.com. Guys, if you’re driving, don’t bother taking notes, we’re going to have everything linked right there from Texasbusinessradio.com. Dave thank you very much for joining us.
Dave Baker: I appreciate it. Thanks for inviting me.
Jay Curry: Congratulations, well done.
Dave Baker: Thank you. Thank you.
Matt Register: All right guys, unfortunately we’ve got to go pay a couple of bills. Take a very quick break. We’re going to be back right after this with a whole lot more from Valve World Americas 2017 here at the George R. Brown Convention Center in Houston, Texas. We’ll be back. Don’t go anywhere.
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In addition to hosting "Texas Business Radio," Matt is an investment banker and serial entrepreneur from Montgomery, Texas. He is the owner of RREA Media and Register Real Estate Advisors and a Managing Director and Principal at Corporate Finance Associates. He has a BS from the United States Military Academy at West Point and an MBA from Rice University in Houston. You can read more about Matt HERE.