Industrial Magnetics, Inc. (IMI) designs and manufactures both standard and customized magnetic workholding, material handling and separation devices. Most of these products are made in the United States—a point of pride for the company, which also offers magnet-related services to its clientele.
Since Industrial Magnetics, Inc. was profiled in October of 2019’s Manufacturing in Focus, the Boyne City, Michigan firm has bought another company, celebrated a sixtieth anniversary, endured COVID-19, and expanded its plant.
Chief Business Development Officer Dennis O’Leary describes the purchase of Walker Magnetics as “the single biggest change” at IMI. “We’re very acquisitive, as our track record from the last five years shows,” he says. “Meaningful acquisitions are the most effective way—if done correctly—for us to grow.”
Indeed, over the past few years, IMI has purchased Sterling Systems & Controls in Sterling, Illinois; Javelin Manufacturing in Fort Wayne, Indiana; Prater Industries in Bolingbrook, Illinois; and Clamp Manufacturing Co., Inc. in California. When possible, IMI centralizes the operations of firms it acquires in Boyne City.
Walker Magnetics, a former rival of IMI with facilities in Windsor, Connecticut, and Columbus, Ohio, was purchased last September. Walker designs and manufactures industrial magnetic solutions for material handling, scrap magnet, recycling separation, lifting, and work-holding applications.
O’Leary says that the company is “always looking” for potential purchases. He describes IMI as “really a fabrication shop that specializes in magnetic circuitry design,” and says that if a company “fits into our value streams, we’re open to [acquisition] discussions.”
Industrial Magnetics went through a huge expansion in 2015, adding 18,000 square feet to its Boyne City plant. To accommodate new employees and operations gained through recent acquisitions, IMI has embarked on another expansion involving 36,000 square feet of new manufacturing space. Construction will be complete this summer.
This growth comes as Industrial Magnetics marks two big birthdays. Both IMI (founded in 1961) and Walker Magnetics (founded in 1896) passed major corporate milestones this year.
“We’re celebrating our sixtieth anniversary, and Walker Magnetics is celebrating their 125th. That makes us feel like children compared to them. It’s really been a fantastic acquisition for us—a company that’s been a competitor of ours for a long time,” laughs O’Leary.
“I think honesty and integrity are probably our two mainstays. We have [standards] internally that we expect of all our employees. We really strive to make sure relationships with our customers and our channel partners who help broaden our customer base are more than transactional. There must be a mutually beneficial relationship for both sides of the transaction. We like to make it’s more than just ‘What’s your price?’ and ‘Do you have them in stock?’ For us, it’s ‘What’s your application? We would like to provide you with a solution and then be your go-to the next time you have a need.’” he explains.
IMI serves the welding, fabrication, automotive, conveying, recycling, stamping, mining and aggregate, food, feed and grain, and petrochemicals segments and is organized into segments, reflecting these markets. At present, it has an Automation group, Mag-Mate ® group, Tramp Metal group, and a new Smart-Mag® group.
The automation group specializes in end-of-arm tooling, lift systems to move steel parts and sheets, magnetic conveying rail, and magnetizers and demagnetizers, among other items. These products are used in applications such as conveying, fanning, transferring, lifting, stacking, and de-stacking metal components.
The Mag-Mate group concentrates on magnetic assemblies and fixture magnets, holding magnets and shop tools, lift magnets for transferring and moving parts, electromagnets, manhole cover lift systems, raw magnet material, cutting table tools, and a range of other products.
Tramp metal is metallic scrap that may end up on conveyors and must be removed. The Tramp Metal group is focused on liquid line magnets, pneumatic line magnets, conveyor line magnets, and gravity feed magnets. Magnetic separators offered by this group are used to remove unwanted tramp metal from products and equipment.
The new Smart-Mag group offers programmable smart magnets and products. O’Leary describes Smart-Mag as “a totally unique, standalone technology. It’s been a good revenue stream that we think has a lot of upside to it. It’s very much a different product than anything else we sell. It’s relatively new… and for kind of next-generation, disruptive applications. For example, instead of using mechanical latching systems for cabinets and panels and doors and drawers, you can utilize Smart-Mag technology to perform the same function but in a more efficient and effective manner.”
Smart-Mag products were originally sold through the Mag-Mate group, but the company “decided to pull [Smart-Mag technology] out, create its own product family and give it some space,” he adds.
It also sells testing and inspection products such as electronic magnetic pole testers, magnetic inspection probes, and magnetic pull test kits.
As O’Leary notes, IMI does most of its own manufacturing. The decision by some North American companies to move manufacturing operations offshore was “a short-sighted move,” he says. “We lost a generation of tradespeople because of it.” While the “per piece cost of an import is demonstratively less than something we could manufacture here,” there are numerous disadvantages to offshore manufacturing.
There can be long lead times and problems with consistency, quality, and supply. The company does buy some imports, including small assemblies and raw materials, but wants to keep its manufacturing operations in-house.
“When you look at the spaces in which we exist, we’re generally viewed as a company that’s respected. We don’t like to lead with price. We like to provide solutions first. That sets us apart,” he says.
Another thing that sets IMI apart is the company’s commitment to cross-training. The firm teaches employees how to perform different duties in different departments. Cross-training has been “critical to our success and meeting lead times,” and ensures that “just because somebody’s gone, we don’t have to slow down in that department.”
The advent of COVID-19 was an unexpected development. When the virus spread was particularly high, the Governor of Michigan closed schools to prevent further transmission. As a result, two IMI employees opted to leave the company so they could look after their kids at home.
Otherwise, “everybody in our company worked a standard workweek. We had a number of people who worked from home. If they could do their job from home, we encouraged them to work there until we felt everything was a little more under control. We didn’t put anybody on reduced hours,” O’Leary states. Some of IMI’s services had to be conducted virtually via computer during the worst of the pandemic.
New health measures were implemented to reduce the risk of COVID infection among staff. “We had to shut down all our entrances except two. We had one shop entrance and one office entrance, and everyone took a scan in the morning before they get into the building. [Employees] filled in a daily health screen with eight questions. Once it gets completed, it goes to the HR department to be checked and logged on a daily basis. We have hand sanitizing stations and masks all over. We did everything required by CDC and subsequently MIOSHA [Michigan Occupational Safety and Health Administration],” he says.
For all these efforts, COVID did affect IMI’s balance sheet. “Our topline revenues took a dip, but we’re still very profitable. The last few months were really good. [That period] coincided with the acquisition of Walker, so that helped picked up our revenue. In 2021, it’s been a great first four months,” states O’Leary.
Due to COVID, the company temporarily switched to a mostly online promotional strategy, reaching existing and potential customers via social media posts and email. Now that the virus appears to have peaked and vaccination levels rise, IMI looks forward to attending live trade shows again.
In addition to its extensive product line, it offers services ranging from preventative maintenance and magnet audits to plant audits and lift magnet testing and certification. Lift magnet repair is a new skill, added after the Walker Magnetics purchase. This service was “a big component of that acquisition,” says O’Leary, noting that this is, “something we’ve never really got into before.”
Into the future, O’Leary looks forward to more acquisitions, employees and revenue. “At one time we were fifty employees. Now we’re at 115. We’ll be 130 by summertime,” he states. Within five years, he hopes the company will be “somewhere north of $100 million in revenue.”
As IMI moves forward, one thing that will not change is the firm’s client-first focus and emphasis on product development. “We continue to run our business the right way. We will continue to be profitable, which will satisfy our shareholders. We will continue to strengthen our employee base. With strong employees come strong products. And we’ll continue to have more satisfied customers. That’s kind of the magic mix if you will,” says O’Leary.