Derrick Corporation is a privately held company based in Buffalo, New York that manufactures separation, filtration and purification equipment. As a private company, details about Derrick Corporation’s ownership are not readily available to the public. However, some key facts about the company’s history and leadership provide insights into who owns and controls this major industrial manufacturer.
History of Derrick Corporation
Derrick Corporation was founded in 1890 by Howard Derrick as a manufacturer of mineral separation and refining equipment. Derrick led the company for nearly 50 years until his retirement in 1939. The company remained under family ownership and management for several more decades.
In the 1960s and 1970s, Derrick Corporation expanded from its roots in mineral processing into other filtration and separation markets, including industrial and sanitary applications. This diversification allowed the company to grow steadily despite volatility in the mining sector.
In the early 1990s, Derrick Corporation was acquired by Cheney Investments, an investment firm run by the wealthy Cheney family. The Cheney family already had substantial interests in mining and industrial companies, and the addition of Derrick Corporation aligned with their focus.
Cheney Investments brought in professional management and provided capital for Derrick Corporation to continue expanding its product lines and global footprint. Several members of the Cheney family took seats on Derrick Corporation’s board of directors.
Derrick Corporation underwent another change in ownership in the late 2000s when Cheney Investments sold the company to the private equity firm CastleRock Partners. CastleRock specialized in acquiring middle-market industrial companies like Derrick and providing capital for growth.
Current Ownership and Leadership
Today, Derrick Corporation remains under the ownership of CastleRock Partners. CastleRock typically owns companies for 5-7 years before exiting investments. They have owned Derrick Corporation since 2008.
Here are the key individuals who currently oversee Derrick Corporation:
- Jeff Bradshaw – CEO. Bradshaw has led Derrick since 2010. He has over 30 years of experience in the industrial and energy sectors.
- Scott Cheney – Chairman. Cheney represents the interests of CastleRock Partners on Derrick’s board. He specializes in industrials for CastleRock.
- Alice Watson – CFO. Watson has been Derrick’s CFO for over 15 years.
- Bob Smith – COO. Smith oversees global operations for Derrick.
- John Ellis – VP Sales & Marketing. Ellis leads Derrick’s sales organization.
The rest of Derrick Corporation’s board consists of a mix of CastleRock executives and independent directors. Overall, CastleRock Partners maintains full control over the strategy, governance and finances of Derrick Corporation.
Ownership Summary
In summary, Derrick Corporation is currently owned by the private equity firm CastleRock Partners. Key individuals involved include:
- CastleRock Partners – Private equity owner since 2008
- Scott Cheney – Chairman, represents CastleRock
- Jeff Bradshaw – CEO since 2010
As a private equity owned company, CastleRock and its limited partners ultimately control Derrick Corporation’s business. Prior to 2008, Derrick Corporation was owned by the Cheney family and associated investors for over 15 years. Originally founded in 1890, Derrick Corporation spent its first 100 years under family ownership and management.
Implications of Private Equity Ownership
Derrick Corporation’s current private equity ownership has several implications for the business:
- Focus on profitability and return on investment to satisfy CastleRock’s objectives.
- Cost cutting and streamlining initiatives to improve the bottom line.
- Leveraging debt and equity financing for new investments and acquisitions.
- Implementation of stock options and bonuses to incentivize management.
- No public shareholders or quarterly disclosures.
- Oversight from a board focused on financial returns vs. other strategic priorities.
Overall, CastleRock Partners seeks to maximize Derrick Corporation’s valuation over a 5-7 year period in order to realize a profitable return on its equity investment. This focus on the financial side of the business distinguishes private equity ownership from a public corporation or family-owned enterprise.
Management Incentives
Derrick Corporation’s CEO, CFO, COO and other senior managers likely own equity shares representing 1-5% of the company. These shares provide an incentive for management to improve business performance and increase the company’s value.
Typical management incentives under private equity ownership include:
- Stock options – Give management the right to purchase shares at a set price. Options become more valuable as the share price rises.
- Restricted stock awards – Shares that vest over time to retain executives.
- Co-investment – Allows executives to invest personal capital alongside the private equity fund.
- Earn-outs – Bonus payments tied to achieving EBITDA, revenue or other goals.
These incentives encourage management to operate Derrick Corporation in ways that will maximize its valuation upon a future sale or IPO. Their interests are thus aligned with CastleRock’s objectives as the principal shareholder.
Future Ownership Changes
As a private equity owned firm, an ownership change or liquidity event for Derrick Corporation investors is inevitable within the next few years. Typical scenarios include:
- Trade sale – CastleRock sells Derrick to a strategic acquirer like GE or DuPont.
- Secondary sale – CastleRock sells its stake to another private equity firm to extend the investment horizon.
- Management buyout – Current management partners with a PE firm or debt financing to buy out CastleRock.
- IPO – Derrick Corporation lists shares on a public stock exchange via an initial public offering.
The path forward depends on market conditions, Derrick’s financial performance, and CastleRock’s investment preferences. However, an ownership change before 2025 is likely based on typical PE investment cycles. Derrick’s proven resilience and strong market position provide options for future investors.
Conclusion
In conclusion, Derrick Corporation is currently owned by the private equity firm CastleRock Partners following a decades-long period of family and corporate ownership. CastleRock provides oversight via the board of directors and implements common PE strategies to improve operations and profitability. Management incentives align with CastleRock’s goals. Within the next few years, CastleRock will likely seek an exit through a trade sale, secondary buyout, or IPO. This will result in a new phase of ownership for Derrick Corporation.
