St. Augustine’s Ideal Aluminum takes on equity partner to fuel growth (Courtesy of the Jacksonville Business Journal) — About a decade ago, Doug Brady and Michael Siegel bought Ideal Aluminum out of bankruptcy. This year, they are so busy that they have taken on investment partners, almost doubled their workforce and are expanding at their St. Augustine facility.
It’s been a dizzying year for the fence manufacturer, but Brady and Siegel have been willing to change the structure of their business in order to go forward.
“This has been the most challenging year of my career,” said Brady, who is a partner and serves as co-CEO with Siegel. “I say that because the labor market is in chaos, inflation is very difficult to keep up with and we … are dealing with the global supply chain issues.”
Inventory is stacked up at the Ideal Aluminum facility in St. Augustine.
Demand in the building sector has increased demand for Ideal’s products, so orders have been increasing. But the company couldn’t just flip a switch and start producing record numbers of products immediately.
That’s why Brady and Siegel took on a partnership with Morgenthaler Private Equity in a deal that closed in July. The influx of capital allowed Ideal to take on a full second shift, which meant adding approximately 100 extra employees — bringing the total near 250.
It also allowed for an investment of almost $2 million at the facility to increase its shipping capacity.
“We feel really fortunate to have found MPE,” said Siegel, who is also a partner and co-CEO. “For Doug and I to grow this business, we couldn’t grow it incrementally anymore.
“We had grown it incrementally and fast incrementally. But the reality is to grow it exponentially, we would have had to put more at risk, and so to bring in a partner to do that with us is very exciting.”
Fence pieces are placed into a machine for powder coating at the Ideal Aluminum facility in St. Augustine.
For MPE, the decision to invest in Ideal was a good opportunity, said partner Graham Schena. Because of the spending around construction right now — whether it’s new homes, renovations or commercial — his group wanted to invest in an ancillary sector like fencing.
“We visited a lot of businesses in the fence space over the last 12 to 18 months, and they (Ideal) had one of the best facilities and team that we had met with,” Schena said.
Since Brady and Siegel first acquired Ideal, they have grown revenues by 800%. But having MPE on board has allowed for even more rapid growth.
With the partnership in full force and the second shift started, Brady said production has increased 60%-70% just since this summer. And it’s a good thing because demand is so intense.
The biggest obstacles to maintain the growth are the same ones affecting almost every business now: supply chain uncertainty, shipping issues, a tight labor market and inflation.
“You have more metal than you need one week and not enough the next week,” Brady said of the supply chain. “It makes it difficult to plan production; it makes it difficult to plan deliveries.
“I think our workforce has really risen to the challenge and has taken care of our customers probably better than we anticipated. I think that’s showing in that there are constant price increases and our customers seem to be sticking with us – not seem to, they are.”
Construction takes place outside the factory building at Ideal Aluminum in St. Augustine. The company is making improvements to the property as it increases productivity in order to meet growing demand.
Dealing with so many unprecedented issues all at once isn’t the easiest situation, but Brady acknowledges that being too busy isn’t the worst problem to have.
The changes that have happened at Ideal have Brady and Siegel feeling confident about the potential of the company.
“We’re very optimistic about 2022 and beyond,” Brady said. “I think we’re more excited and confident about 2022 because of all the brainstorming and hard work we’ve had to put in in the last 90 days.
“We’re very happy with where we are going. We are going to be a better company next year.”