In 1976 a young attorney named Peter McCausland was hired by Messer Griesheim, a German industrial conglomerate, to be general counsel for their industrial gas production and distribution subsidiary in America.
Messer had been vigorously expanding its presence in the U.S. gas industry, and McCausland — armed with a law degree from Boston University — was hired to assist with acquisitions. He quickly learned the ins and outs of the industry and met many of the people who would become key players in the Airgas story.
CONNOX: AN OPPORTUNITY IDENTIFIED
“I knew enough about operations, having worked at Messer, to know I really liked the business. I was also fascinated with the chemistry of the process.”
One day in 1981, McCausland sent his boss a memo recommending that Messer purchase a small oxygen distributor in Stafford, Connecticut. The memo was returned with a brief note: “No more acquisitions for three years.” That decision set McCausland on a path he could not have imagined in his wildest dreams.
McCausland left Messer to start his own law practice. Meanwhile, he just could not shake the idea that Connecticut Oxygen (Connox) would be a great company to own — perhaps it could make a nest egg for his retirement.
FINANCING THE DEAL
McCausland believed that Connox might attract the interest of venture capitalists. He pitched his idea to J. B. Doherty, head of TDH Capital, who was inspired by the young, bow-tie-clad entrepreneur before him — and impressed by his proposal. TDH put up $1 million, and after much struggle an asset-based lender was found for the additional $3.85 million needed. By February 1982, McCausland and his associates were the proud owners of Connecticut Oxygen.
“The deal died a thousand times because they didn’t think I could deliver.”
U.S. AIRGAS FORMED: 1982
U.S. Airgas was formed as holding company for the newly acquired firm. McCausland owned 60 percent of the business and served as part-time chairman. Tom Mason, a former colleague from Messer, took on the critical task of running Connox. Mason had a 15-percent stake in U.S. Airgas; and TDH Capital, the remaining 25 percent.
McCausland considered himself a lawyer first and foremost, but the entrepreneurial spirit rarely conforms to plan. The “thrill of the deal” proved too powerful and, one after another, many small companies were gathered under the umbrella of U.S. Airgas. The timing could not have been better.
“It was going to be my nest egg to send my kids to college and for retirement.”