FROM $20 TO $5
As the U.S. economy went through a recession at the turn of the millennium, certain challenges inherent in the growth of Airgas were exacerbated. The slow payoff to the complex and costly hardgoods strategy, the first expansions into foreign lands, the need for a stronger corporate staff, and conservatism within the Airgas Board of Directors all served to intensify the challenges of a prolonged downturn in U.S. manufacturing made worse by offshore migration.
“We sold off a lot of things we shouldn’t have, like our three companies in India, which were solidly profitable, and five solidly profitable companies in Poland. We also sold off our CO2 reserves in Mississippi....
Airgas’ stock price plummeted from $20 to a low of $5 at the height of the dot-com bubble in 2000. The stock price decline rattled the Board of Directors, which began to question repositioning and overseas expansion. An “activist” investor filed a shareholder proposal, challenging management’s strategic direction. Feeling pressure, the Board moved to sell a number of assets that were seen as low-return or “non-core.”
Despite the recession and the lack of confidence on the part of investors, Airgas still outperformed nearly all of its competitors during these difficult years.
THE PROMISE OF PURITAN
One area where Airgas continued to expand its horizons despite challenging times was in medical gases, such as oxygen, nitrous oxide and carbon dioxide. In January 2000 the company purchased the Puritan-Bennett medical gas business. Puritan was a recognized and trusted name in the medical gas industry, serving hospitals, providers of home services, elder-care facilities and others in the healthcare industry. With $70 million in annual sales, Puritan more than doubled the size of Airgas’ existing medical gas business.
Today, Airgas is a top supplier of medical gases, offering a full range of gases and medical gas equipment to hospitals, doctor/dentist offices and home healthcare providers. Airgas has the largest medical cylinder fleet in the U.S. and over 350 FDA-certified medical fill plants.
“Puritan-Bennett represents a strategic opportunity in this growing segment of our core business, positioning Airgas as the leader in medical gas distribution in North America.”