After shedding several ancillary businesses, acquiring a few others and being taken over by a San Francisco-based private equity firm, officials from Tolland’s Gerber Scientific say the company is making a comeback.
Gerber has quietly been investing heavily in research and development and is coming to market with a host of new products for manufacturers and the apparel and fashion industries.
Gerber officials and investors say they are once again bullish about the company’s future as they revert back to a strategy of growth through innovation.
Just two years after Gerber was sold for $282 million to Vector Capital — amid financial strain and economic uncertainty — the manufacturer is pushing toward a goal of 10 percent annual growth.
So far, things appear to be headed in the right direction.
In its most recent fiscal year, which ended April 30, Gerber’s earnings grew by 57 percent, company officials said.
“I’d like to see the company again be considered the clear leader in the markets in which they play,” said Amish Mehta, Vector Capital’s managing director. “Today, depending on where you go in the world, they’re either a leader or second or tied. It’s not clear, like the Coke/Pepsi wars, so we need to reestablish that market position.”
Gerber is best known for its automated systems for designing and processing a variety of flexible materials for sign making, apparel, packaging materials, the aerospace industry and more.
The business began as the Gerber Scientific Instrument Co., founded in 1948 by Austria native Joseph Gerber to support his invention of a variable scale, the first of 675 patents he’d eventually hold.
Over time, Gerber expanded into a number of diverse arenas, including ophthalmic lens processing systems. But the 2008 financial crisis hit the company hard (its stock price fell to as low as $2), forcing Gerber to embark on a major restructuring that included layoffs in Connecticut and abroad.
Gerber also sold off several businesses including its optical equipment and sign-making distribution units. The company also sold its South Windsor headquarters and consolidated operations in an existing facility in Tolland.
“The whole world moved into recession at that time,” said Michael Elia, who took over as Gerber’s president and CEO in August 2012. “We went into the same mode everyone else went into, which was to try to catch a falling knife.”
Today, Gerber Scientific operates four businesses. The core business, Gerber Technology, supplies automated material spreading and cutting systems for flexible materials, while Gerber Scientific Products provides computerized sign making and specialty graphics systems. Virtek Vision International provides technology for the aerospace, sheet metal and construction industries, while Yunique Solutions offers product lifecycle management software primarily for the apparel industry.
The company’s tighter focus caught the attention of Vector Capital, which specializes in investing in technology-related businesses. The private equity firm manages over $2 billion from a variety of investors, including university endowments, foundations, financial institutions, and wealthy families.
They specialize in taking struggling public companies private, which is the move they made in buying Gerber in 2011.
“When we looked at Gerber, what we saw was a terrific global brand name and a phenomenal set of intellectual property and technology assets, but we felt that over the last decade, the company had fallen off its innovation track and lost some of its market-leading product focus,” Mehta said. “We felt we could really help rebuild the business.”
A big part of rebuilding has meant getting Gerber back to its core competency: innovation and product development.
“More dollars have gone into innovation in the past 18 months than in the previous five years,” Mehta said, adding that investment is expected to grow approximately 15 percent year-over-year compared to fiscal 2013.
The result has been a number of new products including the Iris Spatial Positioning System, a leading edge technology for companies that manufacture heavy equipment such as mining trucks, planes and excavators.
“Iris guides welders through the whole assembly process using lasers,” Elia said. “It’s fantastic technology because it doesn’t require targets to get its bearings. It literally works in space.”
Gerber continues to focus on products for the apparel and fashion industries, recently introducing an update to its AccuMark software for automating pattern design, grading and marker making for a variety of sewn products. Other new products automate cutting systems for corrugated and folding carton packaging and provide computerized sign making and specialty graphics systems for sign shops and graphics professionals.
In addition, since May Gerber has launched three new products related to its YuniquePLM product lifecycle management software. Gerber expects to debut four new products at a global trade show in Shanghai, Elia said.
Although tightlipped on the specifics, Elia said Gerber “absolutely has a whole list of new products that we’ll be introducing. We’ve invested a significant amount of money in engineering and research and development for some future products that we’re very excited about.”
To support its growth plans, Gerber is also staffing up. After cutting jobs in the process of divesting some of its businesses, the company now has about 950 employees, 325 of whom are in Connecticut. Bringing in new talent is one of its top priorities, Mehta said.
“I was skeptical about finding great technology talent in the Hartford/Tolland area, but so far it’s been terrific,” he said. “I thought we might have to move the company to Boston for that reason, but I don’t think we do.”
In addition to technology professionals, Gerber, which does business in about 130 countries, maintains a large staff of service representatives throughout the United States, Europe and Asia.
In terms of Gerber’s relationship with Vector Capital, both sides say they’ve established a fruitful partnership.
“They’re very engaged in the business so our board meetings are very high energy,” Elia said. “They also bring a lot of financial skills as well as business and market analytics, along with helping find potential partners and acquisition targets.”
