Fetter President Buys the Company
Monday, January 21, 2008
Press release from the issuing companyJanuary 18, 2008 - Louisville, Ky. -- As Fetter enters its 120th year in business, it will remain a Louisville-owned company. President Terrence R. Gill, Jr., who has been with Fetter for 17 years, purchased the company December 21, 2007.
Through an ESOP (Employee Stock Ownership Plan), Fetter had been 100% owned by the employees. The shareholders overwhelmingly approved the sale. The complex nature of the ESOP restricted available cash for reinvestment into the company. By taking sole ownership, Gill says the company will have more financial freedom.
Another benefit of sole ownership is that it keeps Fetter operating in Louisville. Gill says companies such as Fetter have become tempting acquisition targets for out-of-town competitors interested only in the customer base, not the local operation.
"Our vision is clear," says Gill. "We will grow our existing business by utilizing the expertise of our current management staff and employees. So the plan is to strengthen Fetter's position as an independently owned company operating in Louisville with national customers."
Traditionally known as one of Louisville's premier printing companies, Fetter changed its business model two years ago by creating two separate operating units. One focuses on the paint and coatings industry. The other, which is known as Fetter CMD (Content Management and Distribution), provides content distribution and fulfillment-management services to the health care and financial services segments.
"Our new business model has proven to be successful and profitable," says Gill, "and we are well positioned to increase our market share in both areas."
For paint and coatings, Fetter provides packaging and marketing services for both architectural structures and the automotive industry. It is currently the second-largest supplier of decorative packaging, which includes prime labels for paint cans. Market share has risen from 15 to 20% in the past two years. In 2007, Fetter shipped 120 million labels.
With more than 40,000 SKUs in its inventory system, Fetter has developed a proprietary Asset and Content Management platform to help clients manage the constant change they face due to regulatory compliance and market demands. The patent-pending software is named SMART Productivity Suite.
Some of Fetter's customers include three of the top five paint companies in the U.S., as well as industry-leading health care companies. "We've been servicing the paint and coatings industry for more than 50 years with our rookie customer being with us for more than a decade. Nobody knows paint in the tank like we do," says Gill. "On the health care side, we're working with some of the best and most innovative people in the industry. So the relationships we have with our customers are extremely strong."
Fetter CMD was formed in 2005, focusing on services provided to companies offering health care and financial benefits. The mainstay of this operation is providing a Web-based interface with brokers and salespersons who can customize proposals that cater to the needs of prospective customers. Fetter CMD also hosts online fulfillment sites to service national brokerage firms.
Gill describes the two industries that Fetter serves - paint/coatings and health care/financial - as extremely demanding. They require dedicated or purpose-built information management tools, which need to be developed with Fetter's in-house IT resources. "There are now substantial barriers to entry, which gives us a leg up. We have shown a unique ability to service our customers, which is proven by our increase in market share," states Gill.
While the paint label and health care benefits businesses may not seem similar, both operate in a regulatory environment. Both are also inherently complicated with constant change. Because of this, Fetter has evolved into an information management company with production services. "Our printing background has prepared us well to service these niche industries," according to Gill. "As we move forward, we will continue to invest in our information management systems and our people. This means building customized solutions to solve real problems. It requires a commitment to developing and then supporting these solutions while keeping an eye out for the next best thing. It's a way of thinking that is output agnostic, letting the economic and speed requirements determine what medium is used to deliver a message or label."
The Louisville printing industry has traditionally been strong and competitive. But the printing industry is tough. According to NAPL, a printing trade association, the number of printing establishments nationally has declined nearly 20 percent over the past 10 years. The key to thriving and surviving, says Gill, is finding strong niche markets, plus having the foundation and know-how to service clients.
"We've got a great company, great people and we're going to focus on our strengths," says Gill. "We're entering our 120th year with everything moving in the right direction. And we're looking at many more years of success."
Founded in 1888, Fetter has always operated in Louisville, Ky., and currently has approximately 130 employees. Through the years, it has had only five owners, plus the ESOP, which was formed in 1992 by then-owner E.A. Ford.
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