Growing a niche manufacturing business can be challenging, as doing so often requires investment in new equipment and personnel that a company’s current customer base does not support. Moreover, small manufacturers are often subject to significant customer concentration, and issues at a prominent customer can force companies to use resources previously budgeted for growth initiatives to be reallocated to more pressing issues.

This was the case at MCM portfolio company Performance Plastics (“PPL”), a highly technical injection molder of fluoropolymers and other highly engineered resins, when MCM first invested in the company in 2015. The company focused on the most technically challenging opportunities taking great pride in solving complex problems other molders were unwilling, or unable, to tackle. After spending a day at the facility meeting with PPL’s management team, it was clear the company had unique capabilities and engineering expertise. However, it was also evident the company historically viewed sales and marketing as a suboptimal use of corporate resources that could better be spent elsewhere. This approach left PPL with a rather thin sales pipeline populated by a handful of “science projects” and a business development culture which was marvelously responsive but less than proactive.

Leading up to the acquisition, MCM’s goal was to double the Company’s revenues through organic growth in 5-7 years. At close, the business was capitalized with sufficient resources to (1) completely redo the company’s website (2) create content around its unique capabilities (3) hire a senior sales and marketing executive and (4) participate in several tradeshows and other industry events. Unfortunately, PPL, like many small manufacturing companies, had significant customer concentration and relied on the continued stability of its largest customers. Shortly after we acquired the business, its two largest customers experienced softening in their end market, leading to a 16% decrease in overall revenue. Thus, the resources we counted on to help fund the aforementioned marketing initiatives shrunk considerably at a time when new business development became ever more critical.

Faced with limited resources due to the drop in sales, it was time for Plan B. How could the company generate new business given its now diminished business development budget? Over the years, we’ve learned existing customers can represent the easiest and quickest sources of new revenue. Often, especially at engineering-centric businesses, even legacy customers do not have a full understanding of the company’s capabilities beyond the narrow scope of the projects the company is currently servicing.

With that in mind,  Mr. Harry Shimp, MCM Senior Operating Partner, organized an extensive customer outreach program wherein he and members of the PPL senior management team visited or called on every active and inactive customer which had purchased more than $50K in any of the prior three years. Somewhat ironically, the visits confirmed our impressions of the Company as virtually every customer raved about PPL’s technical talents but at the same time made comments like “I thought you guys fired us” and “no one from PPL has called on us in years.”  During these visits it became apparent PPL’s customer base had much more to offer evidenced by a number of ensuing RFQs ultimately netting 18 new tools (i.e., programs), most of which launched in 2017.

Further, we enlisted MCM team members and an independent outside contractor to tackle designing the new website and creating content in the form of white papers, blogs and case studies around PPL’s unique tight tolerance fluoropolymer molding capabilities.  The end result was a professional website which consistently ranked on the first page of important keyword searches.  This was accomplished very economically and dramatically increased the company’s market presence.  All of which contributed to a 28% rebound in 2017 revenue and continued growth to date enabling PPL to make substantial investments in new equipment, engineering and operating personnel, state of the art metrology equipment and further expand its sales and marketing budget.

Today, because of the continued transformation of the company’s business development culture, EBITDA has more than doubled and the company maintains a substantial sales pipeline full of highly technical, commercially viable opportunities.