Airgas Founder McCausland to Get $962 Million in Takeover

  • The largest shareholder, he fought off Air Products bid in '11
  • Started gases business in 1982 with first of hundreds of deals

Peter McCausland, the ex-lawyer who founded Airgas Inc. and expanded it via more than 400 acquisitions, is set to receive about $962 million from his biggest deal of all -- the sale of his company.

The 65-year-old Airgas chairman held 6.7 million shares as of March 31, according to the most recent data compiled by Bloomberg, making him the largest investor in the Radnor, Pennsylvania-based company. Excluding $4.27 million in unexercisable options, his overall interest is worth $958 million. France’s Air Liquide SA said Tuesday it agreed to acquire Airgas for $143 a share.

McCausland established Airgas when he was a 31-year-old corporate lawyer working on potential acquisitions for the U.S. unit of industrial-gas company Messer Group GmbH. He told Messer it should buy Connecticut Oxygen, only to watch as the German company decided instead to exit the U.S. market. McCausland founded a law practice, McCausland, Keen & Buckman, and raised $5.3 million to buy Connecticut Oxygen in 1982.

Airgas sold shares to the public for the first time in 1986. The stock has risen more than 130-fold since then. The offer from France’s Air Liquide values the company’s equity at about $10.3 billion. It would be the largest takeover in the industrial-gases industry in nine years, according to data compiled by Bloomberg.

Led Consolidation

About 2.8 million of McCausland’s shares are held as collateral for a $150 million credit line, which had a $135 million balance as of the company’s March 31 fiscal year-end, according to Airgas’s July proxy filing. Another 341,828 shares are held in a charitable foundation and aren’t included in the calculation. McCausland’s outstanding options would vest in the deal.

McCausland led the consolidation of a fragmented U.S. industrial gases industry, buying up smaller competitors before moving on to units of larger rivals, including Air Products & Chemicals Inc. and Germany’s Linde AG, eventually becoming the largest U.S. packaged-gas distributor.

In 2011, he successfully fended off a hostile $5.9 billion takeover bid from Air Products, which at the time valued his stake in Airgas at $506 million. Air Products finally withdrew the offer after a judge in Delaware ruled Airgas could keep its poison-pill defense. McCausland stepped aside as chief executive officer in 2012 to 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 at the time. “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.”

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