Graphic Controls Corp. is pushing hard to rebuild its medical products business.
The Buffalo company more than a decade ago got more than two-thirds of its sales from medical products, before a former owner, Tyco International, stripped Graphic Controls of the business, shifted it to a sister company and saddled the local operation with a non-competition agreement that kept it out of the business until 2007.
Since then, Graphic Controls has rebuilt its medical products business to the point where it now accounts for around 20 percent of the company’s $100 million in annual sales. And Sam F. Heleba, who managed Graphic Controls for Tyco and now serves as its chief executive officer, is focused on building the medical products business even further, with a goal of it reaching 60 percent of total revenues.
“We want to get there without getting rid of any of our businesses. We want to add to what we’re doing now,” Heleba said. “Our big focus going forward is medical.”
So far, the plan has been working. Graphic Controls’ sales have roughly doubled over the past eight years, thanks in part to the revival of the medical products business, which has complemented growth in other products, such as entertainment and gaming equipment, and its long-time staples of charts, marking systems and medical recording papers.
That growth also has helped swell the company’s local workforce, which has grown from 250 in Buffalo six years ago to 300 today. The company, which had about a dozen sales people outside Buffalo in 2006, now has 150 employees at other sites outside the Buffalo Niagara region, Heleba said.
Acquisitions have been a key part of that strategy, with Graphic Controls purchasing eight businesses since 2004. That’s been good for its Buffalo operations, because Heleba’s strategy typically is to try to shift that new business to Buffalo.
“When we do an acquisition, one of the first things we do is look to see if it makes sense to move it here. We like to have everything under one umbrella,” he said.
That approach, within the past year, led to a $760,000 project to build a clean room within Graphic Controls’ plant at 400 Exchange St. to accommodate the production of a line of syringe filters that it acquired through its purchase of a German company that also made industrial charts and marker pens.
“A lot of the growth opportunity was here in the United States. It didn’t make sense to manufacture in both places, or manufacturer there and ship everything here,” Heleba said. “That business is growing. That business alone is adding 25 to 30 jobs here.”
To further build the medical products business, Graphic Controls has been developing a host of new products. It produces a line of fetal electrocardiogram charts for General Electric, its biggest customer among medical device makers. It makes a disposable cover for body boards used by emergency medical technicians, among a host of other products.
“We’d really like to grow our business in two areas: Anything associated with the operating room, and we really like disposable items,” Heleba said. “Another thing that’s a good fit for us is emergency medical science.”
Graphic Controls already has had some success in growing a new business from scratch. The company branched out to the gaming and entertainment ticket business a dozen years ago, and those operations now account for about 30 percent of the company’s sales.
That business last year printed more than 5 billion tickets that were used by casino customers worldwide, from the Buffalo Niagara region to gaming facilities in far flung places such as Macau and the Philippines. The business also prints the tickets used by visitors to the Walt Disney Co. theme parks.
Those casino tickets require special security features to prevent counterfeiting and also include special coding that allows casinos to track a customers’ activity. In the case of the theme park tickets, they also have to be durable and water resistant.
“It just keeps growing. It’s a crazy business,” Heleba said.
And then there’s Graphic Controls traditional industrial business of making recording charts, along with the ink, markers and mechanical arms that the recording equipment uses. That business accounts for about half of the company’s revenues today.
“It’s a mature business, but it’s a very profitable business for us,” Heleba said. “We’re in three businesses that are totally not related. It’s like we’re this mini-conglomerate.”
Heleba said Graphic Controls is on the hunt for more acquisitions – and Heleba sees Europe as a fertile ground for potential purchases.
“We probably have room for one other acquisition here” at the company’s $15 million, 250,000-square-foot plant that opened in 2001, Heleba said. “Then we’ll have to look at expansion again.”
Heleba said the push for more acquisitions has the backing of Graphic Controls’ primary owner, Boston-based private-equity firm WestView Capital Partners, which purchased the business in October 2010 from a group led by Buffalo-based private-equity firm Strategic Investments & Holdings.
Strategic Investments’ ownership tenure brought much-needed stability to Graphic Controls when it purchased the business in May 2004, at a time when local officials feared that an out-of-town investor would acquire the company from scandal-plagued Tyco and close its Buffalo operations.
The company’s Buffalo roots date back to 1940, when four employees of a printing company loaded equipment on a truck and shifted their operations from Suffolk County to Buffalo to be closer to the Canadian company that owned it at the time. Graphic Controls itself was formed in 1957 as the successor to six separate companies.
WestView is Graphic Controls’ sixth owner since Times-Mirror Co. bought the company in 1978 as a white knight to thwart a hostile takeover bid.
“We have strong support from WestView Capital, who wants us to grow that [medical business],” Heleba said. “With the medical business, the life science business, there is just tremendous opportunity.”