Airgas Founder to Step Aside as CEO to Focus on M&A
Stock Chart for Airgas Inc (ARG)
Airgas Inc. (ARG) founder Peter McCausland, who built the company into the largest U.S. distributor of industrial gases through almost 450 acquisitions, will be replaced as chief executive officer by Michael L. Molinini.
McCausland, 62, will remain chairman, Radnor, Pennsylvania- based Airgas said today in a statement. The change will take effect at the company’s annual meeting in mid-August. Molinini, 61, the chief operating officer, was named a director effective immediately. McCausland said he will focus on strategy and acquisitions.
“I’m pretty intense so it’s hard for me to keep the CEO title and not have my fingers in everything,” McCausland said today in a telephone interview. “This is my chance to dial it back a little bit and focus on the areas where I think I can bring more to the party.”
McCausland’s announcement comes almost 15 months after he fended off a $5.9 billion hostile takeover bid from Air Products & Chemicals Inc. (APD), which had pursued Airgas for more than a year. McCausland maintained that the offer, which Air Products eventually raised to $70 a share, undervalued the company he founded in 1982.
The departing CEO is the company’s largest shareholder with a 13 percent stake, according to data compiled by Bloomberg. McCausland said the succession has been in the works for five years and that he’s looking forward to being able to make trips that last for weeks at a time after Molinini takes over the day- to-day running of the business.
Molinini has been COO since 2005. He joined Airgas in 1997 from National Welders Supply Co., an Airgas joint venture, and has a bachelor of science in chemistry from Seton Hall University in South Orange, New Jersey. Molinini said he and McCausland have similar ways of thinking and they jointly built the current leadership team.
“You can expect very few changes,” Molinini said in the same interview. “It’s all about continuing to stay the course and keep the culture we have and execute on our strategy.”
McCausland said he expects the pace of acquisitions to increase now that the Air Products fight is over and the U.S. economy is improving. Half of the $13 billion U.S. packaged-gas market is still owned by independent companies, he said.
“There may be some bigger things than the independent distributors that I can work on” for acquisitions, McCausland said. “I think we are behind in acquisitions because of Air Products and the recession.”
Founded in 1982
McCausland founded Airgas when he was a 31-year-old corporate lawyer assessing potential acquisitions for the U.S. unit of German industrial-gas company Messer Group GmbH. He recommended it buy Connecticut Oxygen. Instead, Messer decided to exit the U.S. market, so McCausland founded a law practice, McCausland, Keen & Buckman, and raised $5.3 million to buy Connecticut Oxygen in 1982.
That company became the foundation of Airgas, which McCausland took public in 1987. He bought hundreds of smaller competitors and, in the past decade, bought units of larger rivals, including Air Products and Germany’s Linde AG (LIN), on the way to becoming the largest U.S. packaged-gas distributor with about 30 percent of the market.
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