Thomas Russell Co. selling 70 percent stake to Honeywell for $525 million
BY KYLE ARNOLD World Staff Writer
Tuesday, October 02, 2012
10/02/12 at 4:13 AM
Many area manufacturers have ties to the energy industry.
Thomas Russell's return to the natural gas industry 12 years ago paid off big for him and many of his employees Monday when Honeywell International Inc. announced it was buying a 70 percent stake in the manufacturer for $525 million.
Tulsa-based Thomas Russell Co. will soon come under the sway of the Fortune 500 diversified manufacturing and technology company, the two entities announced.
"It was 100 percent wholly owned by employees, and they still have the 30 percent stake," said Glenn Russell, president of Thomas Russell Co. and son of the founder.
He said that during the last dozen years, CEO and founder Tom Russell has granted some employees the right to purchase ownership.
"What's great is that it gives the employees who own some of the company the chance to see it grow more," Glenn Russell said.
Tom Russell started the company in 2000, seven years after he sold a similar natural gas equipment manufacturing firm called T.H. Russell Co. to Houston-based Hanover Co.
He even brought back several of his employees who had moved to Hanover with the sale.
Now some of those employees who were close to Russell are reaping the reward of loyalty and could see bigger payouts soon.
The deal values the 12-year-old manufacturer at $750 million and gives Thomas Russell Co. the resources to expand its fast-growing business internationally. According to a statement from Morristown, N.J.-based Honeywell, Thomas Russell Co.'s 2012 revenue is expected to be about $425 million.
The deal is expected to close in the fourth quarter.
Honeywell is reserving the right to purchase the last 30 percent of the company at a price based on Thomas Russell Co.'s operating performance.
"We've never really had the ability to reach out to global markets," said Lamar Seale, vice president of sales. "This gives us the opportunity to do that, and Honeywell is going to bring in some resources to make that happen."
Thomas Russell Co. makes natural gas processing equipment for customers operating in all of the country's major natural gas-producing regions. Specifically, it makes skid-mounted equipment to be installed at gas-processing plants.
The company's headquarters is at 71st Street and Yale Avenue, but the majority of its operations are at a plant at the Tulsa Port of Catoosa.
When Thomas Russell Co. moved its operations to the port complex, it had 30 employees. Now it employs more than 100 people and has been growing every year, Glenn Russell said.
The deal with Honeywell brings Thomas Russell Co. under the umbrella of Honeywell's UOP LLC division, which focuses on making equipment and performing research for the gas-processing industry.
UOP LLC is based in Des Plaines, Ill. Honeywell has about 130,000 employees worldwide.
Glenn Russell said senior management at the company will stay on as part of an agreement with Honeywell.
Tom Russell and others will remain in charge of the company but will report to management at UOP, Glenn Russell said.
"We're very excited about all of this, and it should be a great opportunity," he said.
Honeywell's deal for Thomas Russell Co.
What Honeywell gets: 70 percent stake
What it paid: $525 million
Total value of company: $750 million
What else is involved: Honeywell can buy remaining 30 percent at future date, management plans to remain with firm
About Thomas Russell Co.
Natural gas processing equipment
Founder: Tom Russell
Original Print Headline: Buyout boosts workers
Kyle Arnold 918-581-8380
Seth Ampberg, a pipe welder for Thomas Russell Co., closes a valve Monday at the company's plant in Catoosa. CORY YOUNG / Tulsa World
Brian Whitson performs a socket weld Monday at Thomas Russell Co.'s plant at the Tulsa Port of Catoosa. Honeywell International plans to buy a 70 percent stake in Thomas Russell for $525 million. CORY YOUNG / Tulsa World