With more than a dozen acquisitions under his belt, Pentair Inc. CEO Randall Hogan isn't afraid to dive into a new market.
And with Pentair's deal to merge with Tyco's flow-control business, analysts expect Hogan to make a splash in the burgeoning water technologies segment.
"The guy is bold," said Mark Henneman, a portfolio manager at St. Paul investment firm Mairs and Power, a longtime shareholder.
Hogan demonstrated that in 2004, just a few years after becoming CEO, when he called founder Murray Harpole to tell him Pentair was reshaping the company Harpole built. Hogan sold off a power tool business that accounted for 40 percent of sales and bought Wicor, a Wisconsin water filtration company that became the foundation for Pentair's foray into water treatment and storage.
Wednesday's merger announcement reaffirms Hogan's strategy. The marriage will double Pentair's size and give it access to global markets, something the company has been trying to do for years.
"This is a growth play," Hogan said. It gives us more control of our destiny."
In an interview, Hogan said the merged enterprise, which will be managed by Pentair, could create more jobs in Minnesota, where it already has about 2,000 employees. Although Pentair has identified about $250 million in cost savings it wants to achieve by 2015, there are no plans to close plants. Pentair will have 100 production facilities around the globe after the merger. The company is expected to achieve cost-savings goals through trimming some back-office functions.
Henneman noted that Hogan has spent the past several years assembling a top management team that has proved to be adept at bringing newly acquired businesses into the fold. An integration team made up of both Pentair and Tyco managers has been formed to work together on combining the companies.
"Big deals like this are tough to integrate," Henneman said. "But over the last few years [Hogan] has strengthened the management team, adding staff to work on deals and good operating people."
Before the Wicor deal in 2004, Pentair had some water-related operations, but they were part of a broad array of disparate businesses that included power tools and paper mills.
Under Hogan, Pentair sharpened its focus, and in the process became a company that investors could understand and find attractive.
Since 2001, when Hogan took the job, Pentair's stock has had an annualized return, including reinvested dividends, of 14 percent, beating the 8 percent return of the S&P 500 index during the same period. The number of analysts following the company has more than doubled.
In addition to enhancing Pentair's profile on Wall Street, Hogan has overseen an effort to build its public image.
The company's name has become better-known locally since 2010, when it donated and installed a first-of-its-kind system at Target Field to recycle rain and irrigation water to maintain the turf and wash parts of the new ballpark.