Flacks Group Acquires Kelly-Moore Paint Company

Flacks Group Acquires Kelly-Moore Paint Kelly-Moore Paints, founded in 1946 and generating over 400 million dollars in revenue with 1,200 employees, has been acquired by Flacks Group. Flacks is an investment firm with assets exceeding 2 billion dollars that aims to acquire companies with diminished brand popularity. According to Charles Gassenheimer, Chief Executive Officer of Flacks Group, the transaction eliminated a significant debt burden for San Carlos-based Kelly-Moore Paints and put the company on a growth and expansion path. Gassenheimer stated, "We are committed to Kelly-Moore's growth. This is a significant opportunity that will enable substantial development and forward-looking business growth." The transaction ends Kelly-Moore's 76-year independent status as one of the Bay Area's most renowned paint brands. Kelly-Moore operates 109 stores in California and 63 in the Bay Area. The company operates 157 stores across North America. Kelly-Moore Paints Chief Executive Officer Steve De Voe stated, "We will continue to have the resources and capabilities to remain highly competitive in the market by continuing to renew and deliver the best products and experiences to our customers in the professional paint industry." Kelly-Moore and Miami-based Flacks Group did not disclose the transaction terms to the public. Gassenheimer, regarding the acquisition of Kelly-Moore Paints, said, "Since 1946, the company's high-quality products have served as an example of American manufacturing, and the superior service it provided has given the company a loyal customer base." Given the defined objective, Flacks Group will likely begin a turnaround process at Kelly-Moore. How this can be accomplished in Kelly-Moore's case was not immediately clarified. In a post on the investment firm's website, it states, "Flacks Group specializes in the acquisition and operational transformation of mid-sized businesses. Flacks Group typically invests in companies with legacy brands that hold businesses considered to have fallen out of favor for various reasons." In Kelly-Moore Paints' case, Flacks Group appears to have maximum flexibility in the acquisition since it purchased the paint retailer, distributor, and manufacturer in an all-cash transaction. The company's new owners are expected to maximize benefit from the paint company's manufacturing complex in Texas. Kelly-Moore had closed a production facility in the Bay Area several years ago. According to Gassenheimer, another potential growth point is the Kelly-Moore distribution complex in Union City. Gassenheimer commented, "While the motor is the Texas manufacturing facility, 75 percent of revenue comes from the distribution center in Union City, which is the key to our store network in California." Kelly-Moore's new owners plan to use the paint company as a platform to drive growth and broader reach by providing more purchasing to retail firms. Gassenheimer concluded, "We have no outside investors and therefore have no pressure to answer to outside investors. We will focus on the business's needs and make decisions based on what is best for the business." Source