Airgas has floated to the top of the industrial gas distribution industry by buying more than 400 companies since its founding in 1986. Its North American network of more than 1,100 locations includes retail stores, gas fill plants, specialty gas labs, production facilities, and distribution centers. Airgas distributes argon, carbon dioxide, hydrogen, nitrogen, oxygen, and a variety of medical and specialty gases, as well as dry ice and protective equipment (hard hats, goggles). Its gases production unit operates air-separation plants that produce oxygen, nitrogen, and argon. Airgas also sells welding machines. Founder and CEO Peter McCausland and his wife control about 20% of Airgas.
Airgas is the largest distributor of packaged gases in the US, with a 25% market share. Outside of the US, it conducts operations mostly in Canda, but also operates in Dubai, Mexico, Russia, and parts of Europe.
The industrial manufacturing and repair and maintenance industries account for about a quarter each of the company's sales; customers primarily make fabricated metal products, industrial transportation and equipment, chemical products, and primary metal products. Other industries served include medical and health services, agriculture, mining, repair and maintenance, and wholesale trade.
Its distribution business accounts for about 90% of the company's sales. Almost all of its sales come from distributing bulk gases (nitrogen, oxygen, argon, helium), gas cylinders, and welding equipment. Airgas also produces gases to supply its regional distribution companies. Its other operations consist of six business units that manufacture and/or distribute carbon dioxide, dry ice, nitrous oxide, ammonia, and refrigerant gases.
The company continually strives to grow its operations through acquisitions in its core businesses, adding seven to 10 companies annually. It focuses on high-growth products with strong cross-selling opportunities.
In fiscal 2012 the company added eight businesses with total annual sales of about $106 million. The largest of the businesses acquired were ABCO Gases, Welding and Industrial Supply Company (ABCO); Pain Enterprises; and Industrial Welding Supplies of Hattiesburg (doing business as Nordan Smith). Connecticut-based ABCO has 12 industrial and gas welding supply locations throughout New England. Indiana-based Pain operates 20 dry ice and liquid carbon dioxide production and distribution sites. Mississippi-based Nordan Smith has 17 locations that distribute industrial, medical, and specialty gases and supplies thoughout Alabama, Arkansas, and Mississippi.
Airgas posted sales of $4.75 billion in fiscal 2012, a 12% increase over the previous year's sales. The strong performance resulted from a 2% increase in sales from the company's recent acquisitions and a 10% increase in its same-store sales, with hardgoods up 14% and gas and rentals up 7%. Demand from customers that year strengthened, particularly in large manufacturing, petrochemical, and energy sectors; even demand from the hard-hit construction sector saw some improvement. The company also recorded a net income of $313.4 million in fiscal 2012, a hike of more than 25% over the previous year.
In 2011 Airgas reorganized its 12 regional segments into four new business support divisions -- North, South, Central, and West -- to leverage a new SAP information systems platform in 2011. Each of the units is headed by a division president. The new company structure is designed to accelerate sales growth and pricing management, and create operating efficiencies. – less