Fall 2006 issue of Horizons

Drive Barry-Wehmiller Success

Paper Converting

Astonishing Growth for

Leading U.S. Manufacturing Firm

The four business platforms represent a key Barry-Wehmiller strategy. “They create a good balance. The platforms support our goal to focus on U.S.-based manufacturing com- panies that serve a variety of markets,” says Lawson. “We recognize that every market goes in cycles. When one market experiences a softening in demand, others will mitigate this by being at a different growth stage of a business cycle.” Barry-Wehmiller learned a difficult lesson about business concentration in the early 1980s. It experienced unbridled growth in a more concentrated market, which heavily focused on the brewery market. However, 1983 brought a major upheaval in the brewery business that sent the com- pany reeling. That's when the major U.S. breweries intro- duced the first light beer products. The significant competition between these new product offer- ings created tremendous expansion in the brewery business that required additional production capacity to brew and

package light beer. It turned out to be big trouble for Barry- Wehmiller. Eventually, instead of adding more capacity and buying more machinery, the big brewers began purchasing smaller breweries and consolidating capacity. “The light beer phenomenon caused a lot of problems at the time because our company was built around higher growth patterns that were not sustainable,” says Lawson. “Growth stopped, resulting in excess people and capacity. It put pressure on our cash flow and, ultimately, our financing.” The company was forced to move from traditional banking to an asset-based finance environment. “Less liquidity just put more pressure on the company,” says Lawson. Clearly, management saw that the company was too focused on the brewery industry. In addition to a new market strategy of growth, value and liquidity, Barry-Wehmiller developed a new acquisition strategy. The company began to acquire businesses in the U.S. and Great Britain.

28 • summer 2006 issue