Bucyrus International, Inc.
Headquarters: Oak Creek, Wisconsin
Revenues: $3.65 billion (2010)
Ticker: BUCY (Nasdaq)
What it does: Designs and manufactures mining equipment
When Tim Sullivan arrived at Bucyrus International in 1976, it was about a $1.5 billion to $2 billion business, adjusted for inflation. He climbed the ladder, left the company in 1998, then returned in 2000 as president and chief operating officer. At that point, a downturn in the commodities market and mounting debt had pushed the business to near-bankruptcy, with revenue of just $280 million.
In 2010, with Sullivan as its president and CEO, Bucyrus reported $3.65 billion in revenue and record earnings of $316 million, ranking ninth on Fortune’s list of fastest-growing companies. “For a company to be 130 years old and be the ninth-fastest growing U.S. company is like an oxymoron,” Sullivan says with a laugh, adding that the business remains in “hyper-growth mode” with about 11,000 employees.
What happened in between 2000 and 2010? Quite a bit.
Upon his return, Sullivan initiated an extreme restructuring—immediately laying off hundreds, eliminating two tiers of management, and cutting spending to the bone. “A flat organization with my finger on the pulse helps drive the business forward in a much faster way,” Sullivan says, adding that he never ceased receiving daily cash flows and working closely with managers.
“It worked out so well that I never changed the structure.”
By 2003, the company was strong enough to broaden its product portfolio through research and development. The following year, Sullivan was made CEO, guiding the company through a successful initial public offering. Within two years of going public, Bucyrus had boosted earnings to $70 million on sales of $738 million and more than doubled its work force, providing the wherewithal to complete two strategic acquisitions.
Chris Roehm, a managing director at investment bank Greenhill & Company who advised Bucyrus on its IPO and subsequent acquisitions, describes Sullivan as “a fighter, a grinder, and a guy who’s not afraid to get his hands dirty.” In 2007, Bucyrus bought Germany-based DBT, which took Bucyrus into underground mining with fully automated machinery. “The guy has . . . the fortitude to make decisions and move forward without looking back,” Roehm says.
For decades, Bucyrus focused on high-tech, computerized machines for surface mining—each costing millions of dollars and designed to mine bulk commodities like coal, copper, and iron ore. The company’s 2010 acquisition of Connecticut-based Terex’s mining division “gave us effectively a complete portfolio of mining machinery,” Sullivan says. The purchase added smaller, diesel-powered machines, allowing for mining of commodities such as diamonds, gold, and silver in smaller quantities, and in remote areas of Africa, Indonesia, Russia, and other areas without access to electricity.
In November 2010, Bucyrus announced an agreement to be bought by Illinois-based Caterpillar—an $8.6 billion deal that will create the largest machinery company in the world, Sullivan says. (The deal was expected to close in late June or July.) The merger also marks the end of his 35-year career at Bucyrus.
“With the strength of two iconic American manufacturers coming together—if this business can’t double in the next five years, I’d be shocked,” Sullivan observes.