Colfax Corp., a global supplier of pumps and valves, has priced its Initial Public Offering at $18 per share. At that price, the 19.8 million shares owned by Chairman Steven M. Rales are worth about $356 million -- adding a nice bump to a net worth estimated by Forbes Magazine now to be $3.0 billion. His brother Steven M. Rales, who does not sit on the board, owns a comparable amount.
According to BusinessWeek, the Rales brothers made their fortune in the Danaher Corp., which owns a "sprawling portfolio of sleepy, underloved industrial businesses -- companies that make dental surgery implements, multimeters, drill chucks, servomotors, and wrenches, just to name a few -- that it seems deliberately assembled to be as unsexy as possible. " The brothers are notoriously reserved, never speaking to the press. They run their business empire from an office six blocks from the White House.
Among local executives, CEO John Young owns nearly 380,000 shares, putting his net worth at roughly $6.8 million.
If you've never heard of Colfax, don't be surprised. Either have I, and I have been covering the business scene in Virginia and Richmond for 20 years. True to the Rales' reputation, Colfax has kept an extremely low profile in its headquarters office on Forest Hill Ave. Here is a history of the company as found in its prospectus:
Our business began with an initial investment by our founders in 1995 with the intention to acquire, manage and create a world-class industrial manufacturing company. We sought to acquire businesses with leading market positions and brands that exhibit strong cash flow generation potential. With our management expertise and the introduction of CBS into our acquired businesses, we pursue growth and improvements in operating margins.
In August 1997, we acquired Imo and Warren, manufacturers of screw pumps and specialty centrifugal pumps. The Imo Pump brand name dates back to 1931, when Bengt Ingestrom, an entrepreneur, and Carl Montelius, the inventor of the 3-screw pump, established Imo Pump. Their last names formed the acronym Imo. Warren was founded in 1897 and is among the oldest pump manufacturers in the U.S. Our acquisition of Imo and Warren formed the foundation of what is now Colfax Corporation.
Through a series of subsequent acquisitions, the company expanded its presence to Germany and India, and pushed into new industries. The company generated $506 million in sales in 2007, up smartly from $345 million two years previously. The company reported net income of $64.9 million.
Bacon's bottom line: From what I can glean from a hurried scan of the website and prospectus, Colfax does not have any manufacturing operations in Richmond. Only its headquarters is here. But corporate headquarters appear to be one of those things that Richmond is best suited for, combining relatively low business costs with access to business services from law and finance to advertising/marketing and IT.