Raleigh-based Color Masters Painting Inc. is buying a Traverse City, Michigan-based painting company in a transaction that will likely boost sales by more than threefold over the next year, President Zeb Hadley says.
The purchase of commercial painting contractor National Coatings Inc. is slated to close on April 15 for an undisclosed amount. Color Masters, which had $8 million in sales last year, expects to top $26 million over the next year because of the acquisition. About 160 National Coatings employees will join the combined company, while Hadley expects to hire another 35 employees in the next year in Colorado, Idaho and Raleigh.
Color Masters was a runner-up in Business North Carolina’s annual Small Business of the Year program last year.
National Coatings specializes in large painting jobs in the range of $500,000 to $3 million; recent projects include casinos, Wal-Mart and J.C. Penney stores and the Colorado and Idaho state capitol domes, and the Denver Broncos football stadium.
Hadley started Color Masters in 2003 as a junior at N.C State University, hauling his father’s power washer from house to house on weekends. Within a few months, he had drummed up enough business to hire two employees and devote himself full time to the company. He surpassed $1 million in sales by 2010.
“We purchased the company to have more brick and mortar offices in the states that we already work in,” says Hadley. Color Masters is poised to improve the business operations at National Coatings, which has relied on paper reports and the U.S. Postal Service. “I plan to integrate an entire platform of technology.”
Color Masters is financing the transaction with help from the Small Business Administration and Fifth Third Bank, which Hadley says “has really jumped to the occasion and pushed the project along to meet our closing date.” Other banks weren’t interested in the transaction because National Coatings was so much larger and geographically dispersed than Color Masters, he says.
The two companies have a combined backlog of $19 million. “We plan to achieve a gross sales volume of $28 to $30 million in 2017 which will make us the largest painting contractor in the Southeast by 30%.”
Pat Burden, who founded National Coatings in 1996, picked Color Masters over two higher bidders because “he wanted me to have it,” Hadley says. Burden died of a stroke in December after striking the transaction.
– Cameron Walker is a writer who lives in Raleigh