VOL. 127 | NO. 154 | Wednesday, August 08, 2012
Praxair, nexAir Form Joint Venture
By Andy Meek
Danbury, Conn.-based industrial gases company Praxair Inc. and Memphis-based nexAir LLC are forming a joint venture that will enable the combined business to have a bigger reach and broader mix of services for customers.
NexAir is one of the largest distributors of atmospheric gases and welding supplies in the United States. According to the terms of the joint venture they’re planning to form, Praxair will contribute eight branches of its packaged gas distribution business in three states – Georgia, Alabama and Tennessee – and will acquire an equity stake in the combined business.
NexAir CEO Kevin McEniry said the arrangement is unique for the industry, in that the two companies are pursuing a joint venture instead of an outright acquisition or sale. In fact, the news follows an actual acquisition by nexAir the company announced at the end of last week, a deal in which nexAir said it has acquired Memphis-based SJ Welding & Industrial Supply LLC.
SJ Welding’s one location on Harbor Avenue will remain open and will be rebranded under the nexAir banner. Terms of that deal were not disclosed.
Meanwhile, there are a variety of benefits to the route both nexAir and Praxair are taking with their joint venture. For example, nexAir, which formed in 1996 when two longtime family-owned Memphis-based companies combined their operations, currently sees about $120 million a year in revenue, according to McEniry.
“The contribution of their business on an annual basis with ours will take our company to about $150 million,” McEniry said. “And we’ll grow our workforce from about 290 to about 350.
“Obviously, this joint venture will give us a little bit of scale in some markets that we’re both currently participating in. But we also think with the two companies formally working together, we can share best practices and that it will ultimately be good for our employees and for the customers we serve.”
He also stressed there will be no changes to the nexAir leadership team, the company culture or how it conducts day-to-day operations.
Praxair, which had 2011 sales of $11 billion, has a major presence in Frank C. Pidgeon Industrial Park, and the company makes, sells and distributes atmospheric, process and specialty gasses and high-performance surface coatings.
“Developing a closer relationship with nexAir allows both companies to expand into new areas that will benefit from our combined capabilities,” said John Panikar, president of Praxair Distribution Inc., the packaged gas subsidiary of Praxair Inc. “Praxair is making major investments in Memphis and the broader Southeast region. Our investment in nexAir is an expression of our confidence in our ability to grow faster together.
“NexAir has been a successful packaged gas distributor in this region and their growth and success have helped our industrial gases business tremendously. Together we will have a stronger support network and broader set of services for customers in the region.”