When Adam Carpenter and his business partners bought Edmonton-based LJ Welding Automation in 2006, they planned to use the company to develop a centrifuge technology. After some simple changes in strategy, though, the existing business took off on its own, and the partners shelved their centrifuge idea in favour of managing growth. Here’s a look at the numbers from before and after the acquisition.
LJ Welding Automation, as it exists today, is the brainchild of high school buddies Adam Carpenter and Ryan Holt and their colleague Tim Robinson. The three were working at a composite technologies company—Carpenter in business development, Holt in project management and development, and Robinson in engineering—and “after three years, we decided to give it a shot on our own,” Carpenter says.
The trio acquired the rights to a centrifuge technology that needed further development, and they realized quickly that they would need another business capable of welding and machining. They hired myriad brokers to look for such businesses far and wide, but it was Carpenter’s father (Brian Carpenter, who remains on the company’s board and is a silent partner) who found LJ Welding & Machine Services, which was originally founded back in 1976 by Larry James Wesley. “My father’s realtor called him to say hello, and my father mentioned that we were looking for a welding and machining business,” Carpenter says. “His realtor said, ‘Why don’t you try Larry?’”
A few years after the Carpenters, Holt, and Robinson bought the company in 2006, they tabled their centrifuge technology. “The rest of the business was growing at such a rapid rate, we no longer had the luxury of having a research-and-development division to develop the centrifuge further,” says Carpenter, who attributes the company’s success to his partners. “We were extremely fortunate to have different strengths. As the old saying goes, ‘The whole is greater than the sum of its parts.’”
Today, the company operates five divisions—machining, welding, engineering, electrical/automation, and millwright assembly—and together they manufacture the machines that automate or semiautomate the welding process for pipes and vessels. “It’s a fairly niche business, but to explain it in layman’s terms, any company that makes steel pipes or vessels—so oil and gas, pulp and paper, and chemical businesses, for example—requires our equipment,” Carpenter says.
The business has grown exponentially in the past eight years, receiving numerous export and growth awards. In 2006, LJ Welding Automation had five employees operating from two of eight bays in a 24,000-square-foot industrial facility. A year and a half later, it purchased the building and the 2.32 acres of land on which it rested. Today, it has more than 60 employees using all 24,000 square feet, and it’s currently constructing a 19,000-square-foot building on an adjacent lot in order to bring its total square footage to 43,000. In 2014, it will also open a rental division in Houston with a US partner. All told, the company’s revenue is 14 times greater than it was in 2006.
The strategies of Carpenter and his partners were simple in theory but took a lot of work to execute properly. “We focused a lot on refining the engineering process, marketing, and the systems and processes to keep everything in check,” he says. Today, LJ Welding Automation is known for its high-quality product and exemplary customer service. “Down time in our industry is horrendously expensive, so our job is to get customers up and running as quickly as possible,” Carpenter says. “And we go to great lengths to do that, rightly or wrongly, even if the customer is at fault.”
Four of the five employees who were with the company in 2006 are still with it today, a feat of retention that Carpenter believes is the result of challenging projects that give employees pride in their work. Case in point: the company recently designed, engineered, and manufactured a custom set of rolls meant for making special lead tanks to contain radioactive water at the Fukushima nuclear disaster.
1 more partner
In early 2014, LJ Welding Automation took on a fourth active partner, Rob Stewart, who had been performing exceptionally well in sales. “He was responsible for a number of large projects and is now our vice president of global sales,” Carpenter says. Key projects Stewart is working on include expansion in Southeast Asia, the Middle East, and Mexico. South America will also “be huge next year,” Carpenter says.
Looking back at the company’s history, Carpenter says he has no regrets about holding off on the centrifuge technology. “The products we’re producing right now, especially the fully automated welding systems, are very satisfying from an engineering and manufacturing standpoint because they’re very complex—much more complex than the centrifuge,” he says. “So the company has turned into something we’re very proud of.”