In 2008, the company opened a second location in Hutchinson, where more welders and engineers were available.
A banker transforms a sleepy steel fabricator into a dynamic global enterprise.
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2016 revenue (projected): $40 million
Current products: Structural steel support systems used in storage units for grain, sand and other materials; quick hitches for farm implements
Markets: Primarily in the Corn Belt; it also sells elsewhere in the U.S. and in 32 other countries
Paul Soukup had no experience in agriculture or steel fabrication when, in 2003, he bought Warrior Mfg. LLC, a quiet little manufacturer in Redwood Falls.
The company then produced two product lines. One was a quick hitch used for connecting a tractor with an implement. The other was conveyor trusses, support towers and other steel structures used in grain handling and storage. With annual revenue of about $4 million, Warrior provided steady returns for the three partners who’d owned the company for two decades.
Warrior still makes that hitch. But it’s the storage structure business that has made Warrior a $40 million company employing 160 people at four locations. Its customers are typically general contractors that work for companies including Cargill, Archer-Daniels-Midland and CHS Inc.; it also sells directly to those giants. And it’s all because Soukup knows an opportunity when he sees one.
Structural steel support systems used in storage units for materials such as grain account for a majority of Warrior Manufacturing’s business.
Before he bought Warrior, much of his career had been spent in commercial lending in the Twin Cities. He then worked for a couple of other companies (see “Running His Own Show”) before realizing he needed to run his own. Hunting for a business to buy, Soukup found Warrior. It had good cash flow, a viable product line, and a long track record of profitability. Soukup partnered with his brother Greg, then brought in a mergers and acquisitions principal from Ernst & Young’s Los Angeles office, as a silent partner and advisor. The brothers took on $4.6 million in debt to acquire the business from the three partners.
Paul Soukup says that that was “far more [debt] than either of us ever imagined when we initially looked at acquiring a small business,”—but Soukup believed that Warrior had the potential to grow. He was right. Most of the debt was paid back in two years as he pursued new grain-storage customers and directed the creation of new designs. He also hired engineers who could create innovative new structures.
By 2008, Warrior had gained enough new business to open a second location in Hutchinson, where more welders and engineers were available. “Our products have the quickest and easiest assembly,” Soukup says. “It’s kind of like an Erector set that you can send to a production site.” Warrior has an array of pre-engineered structure products, as well as the capability of designing customized structures.
There have been other opportunities. “Ethanol needed grain storage, so our product line fit right in,” Soukup says. In 2012, Warrior purchased Micada, a competing manufacturer of storage facility towers and bridges in Hope, N.D. Last year, the company opened a facility in Omaha, where it manufactures bucket elevators and conveying equipment for grain facilities. And in 2016, it opened a sales office in Ukraine.
Keith Levitz, owner of Thorstad Construction in the western Minnesota town of Maynard, has been working with Warrior “ever since they’ve been in existence.” Thorstad has used Warrior’s walkways and towers at grain facilities for customers including Cargill, Jennie-O, and Gold’n Plump.
“The nice thing that I like is the engineering services that they provide and the quick turnaround on bids,” Levitz says of Warrior. “Nobody wants to be sued for a failure of any sort. The design and work that they put into their product creates a track record for them, and for us. There’s never been a structural failure.”
When Soukup bought Warrior, he pictured himself running a quiet little company. “Never did I imagine that the business would continue to come in the door, and we would be able to expand the way that we have and grow to the level that we are today,” he says. That’s what can happen when you follow opportunities.
Running His Own Show
In 1994, after a career in commercial lending, Paul Soukup became CFO for one of his banking clients, Minneapolis-based mailing company Zipsort. He moved on five years later to become president of Olympic Graphics, a Golden Valley-based printer, and along the way, he says, he got a good taste for what it’s like to run a successful business. At the same time, “I had many disagreements about how we could run more efficiently and improve our bottom line. Those disagreements instilled me the idea that ‘Gosh, I have to go do this for myself.’”
And so he did, starting in 2002 when he purchased Warrior Mfg. LLC. He quickly discovered that with the freedom of calling his own shots, he also had to do many things himself, including sales, scheduling and materials purchasing—as well as quickly getting up to speed on the steel fabrication industry. As a business owner, Soukup was able to put to work the practices he had wanted to use at his previous employers, chief among them: Don’t turn down work.
“Rather than saying no to more business, we immediately said yes.” He recalls. “Well, that created the need for more thought and actual production schedule planning.” Remarkably, a production schedule was something Warrior had never had. But it was something that he had learned from the printing industry.
So while Soukup had entered an entirely new industry when he bought Warrior, he was by no means unprepared. “Everything I learned in banking and the other companies I worked for, I’ve been able to use,” he says.