Q&A with Eric Armenat, about his experience operating a Private Equity-backed manufacturing company
Q: When you were hired at Multisorb, what was the situation?
Eric Armenat: Multisorb had been a family-owned business for over 50 years before I was hired to lead the business. They had developed a solid brand, backed by a significant investment in R&D. Unfortunately, the competition was ratcheting up the pricing pressure.
Q: What were your priorities as the new CEO?
Eric Armenat: After spending time learning about both the operations and the market positioning, I realized that there were real opportunities to expand the business. However, we needed to leverage our cost structure so that we could approach the market with a more competitive value proposition. I developed a strategy that I believed would improve our operational efficiency, and enable us to develop and manufacture innovative products targeted at the food and pharmaceutical markets’ unique needs. It was also apparent that the pharmaceutical industry was growing quickly in India, and that our strategic relationship with those customers would be significantly enhanced by manufacturing products in-country.
Q: So, where did Summer Street come in?
Eric Armenat: Although I was confident about the plan to re-position the company, I needed support—a sounding board to test ideas, resources to assemble a new management team, and capital to support investments in innovation and technology as well as improvements to the facilities. Summer Street was the right partner, as they brought the industry knowledge and the resources I needed. They supported my vision of creating a culture of transparency and accountability for the organization, and they ensured that the executive team would share in the success of the company.
Q: What do you feel you accomplished that you may not have otherwise without Summer Street’s help?
Eric Armenat: Their financial support and operational expertise helped us through a lean manufacturing implementation, new and upgraded equipment and systems, and our international expansion into India. With their support, we built a new manufacturing plant in India, improved delivery times and quality, and reduced prices where necessary. As a result, we added new clients and expanded our wallet-share with many existing customers. The net economic result was a 50% increase in EBITDA over a 3 ½ year period. We would not have experienced results that quickly or significantly without them.
Q: Why do you think your partnership was successful?
Eric Armenat: Summer Street’s approach relies on a foundation of trust, mutual respect, and patience. This was abundantly evident in a global operation with significant and complex challenges. Multisorb’s growth plan required a real willingness to engage and participate in making material decisions in real time, day or night—in other words, without the bureaucracy typically found in most organizations. We needed to work fast, we needed our conversations to be open, and we needed all ideas to be valued.
The fact of the matter is that we were supported with ideas and capital throughout the journey of the transformation. The results were incredibly rewarding for both our team members and the company.