Now, he’s an owner himself. This month, he teamed with two prominent executives to buy Dalevillebased Sherry Laboratories, a 180-employee company that does product testing for firms in such fields as aerospace and automotive.
“I’ve been interested in Sherry for about 10 years,” LaMothe said. “I had approached them two or three different times … . I was intrigued with the company because I believed it was needed and necessary and adds value to society.”
LaMothe will serve as chairman and CEO of Sherry.
Teaming with him on the purchase were John W. Fisher, former CEO of Ball Corp., which was founded in Muncie but now is headquartered in Colorado; and Van Smith, president and CEO of Muncie-based Ontario Corp.
The seller was privately held Ontario, which also owns a subsidiary that manufactures components for the semiconductor and medical fields. The purchase price was not disclosed, though LaMothe told IBJ last year he was looking for deals in the $3 million to $10 million range.
LaMothe is perhaps best known for serving as CEO of the Indiana Chamber of Commerce from 1992 to 2002. Under his leadership, the organization grew from the 42nd- to the fifth-largest organization of its kind in the nation.
Despite the success, he longed to be a business owner himself. That’s why he left the chamber. After a stint as president of Carmelbased Oxford Financial Group, he founded the oneman buyout firm Ascendanci Ventures LLC last year and began looking for companies to purchase.
Companies in a variety of fields hire Sherry to make sure technological gizmos are working properly. The testing helps the companies double-check their work and provides a buffer against consumer lawsuits.
Sherry separates itself from other labs by providing a broad variety of tests. Rather than focusing on a niche like metals, it does everything from testing water and soil at cleanup sites to testing food and petroleum products.
“That diversity has been very valuable,” LaMothe said.
While LaMothe wouldn’t reveal the company’s bottom line, Smith said it’s “doing well. It’s growing, healthy and profitable.”
No organization tracks the size of the testing industry, but a 2001 study by the Small Business Development Center at the University of Missouri-Rolla estimated that testing laboratories in 2001 rang up $7.2 billion in sales and employed roughly 200,000.
“We think those numbers are understated,” said Joan Cassedy, executive director of the American Council of Independent Laboratories, who added that today’s numbers are probably much bigger.
“It’s definitely a growing field for many reasons,” she said.
Increased codes and standards for businesses and the threat of litigation have helped the industry blossom, she said.
And there’s a huge upside for Sherry, LaMothe said.
“We think there are significant opportunities in just about every aspect of the company, particularly in the environmental area,” he said. “I see this as a company that can easily grow to three or four times its current size.”
LaMothe, Smith and Fisher chipped in personal funding and acquired a bank loan through First Indiana Bank to make the acquisition. Each will hold an equal share of the company.
Ontario decided to sell Sherry in order to “enable [Ontario] do some other things in its restructuring strategy,” said Smith, who will remain with the Muncie company.
Fittingly, the deal came together because of a personal relationship LaMothe established with Smith while leading the chamber.
Several competitors, as well as an East Coast buyout firm, also had shown interest in acquiring Sherry.
“It’s a lifelong dream of his to have his own company,” said Kevin Brinegar, president of the Indiana Chamber of Commerce, and a friend of LaMothe’s. “His skills are well-suited for a number of types of business, but I think this one in particular.”
And it might not be the last acquisition Ascendanci makes, LaMothe said. He’s already working on another deal.