It is not unusual for founding CEOs to have difficulty turning over the reins, but in an interview, McCausland said that would not be the case at Airgas because he and Molinini have such a good relationship and have “been in lockstep for the better part of seven years.”
Besides, “I’m the biggest shareholder in the company. The last thing I’m going to want to do is interfere with Mike’s role as CEO,” said McCausland, a Merion native and a lawyer by training, who built Airgas into the nation’s biggest distributor of industrial, medical, and specialty gases — such as nitrogen used in food packaging to protect freshness — through about 400 acquisitions.
Frank Foster, who was an Airgas director from 1985 until 2004, said the current board has been talking with McCausland for some time about arranging for a future in which the founder would not be in charge. The changes announced Thursday are “the beginning of a transition, as I see it,” Foster said.
McCausland’s successor as CEO, Molinini, grew up in the packaged-gases business, working as a teenager for his father’s business in North Jersey that did analytical work for specialty-gases producers. “I’ve been around cylinders since I was 15,” he said.
After graduating in 1972 from Seton Hall University with a chemistry degree, Molinini worked for two other companies in the industry before landing at Airgas in 1997.
Molinini, charged with explaining the nuts and bolts of Airgas’ operations to investors, especially the adoption of a complicated new computer system, was a key figure during the takeover fight with Air Products & Chemicals Inc., which became public in February 2010 and took a rancorous turn through the Delaware Court of Chancery, where Airgas’ antitakeover defenses prevailed.
Air Products, an Allentown company that is a major producer of the gases that Airgas distributes in small quantities, went public with a bid of $60 per share, raising it to $70 per share before an adverse court ruling persuaded it to withdraw the offer Feb. 15, 2011.
Since then, Airgas shares have gained 44.5 percent, closing Thursday at $92.04. Over the same period, Air Products shares are down 4.3 percent. McCausland’s Airgas stake alone, at $881 million, is worth $210 million more than it was worth at Air Products’ highest offer.
One Airgas customer said Molinini has a “good operational focus.”
“I think he’ll carry forward the vision that Peter McCausland had about keeping the focus on the customer,” said Jimmy B. Morgan, who until recently was president of Westinghouse Electric Corp. subsidiary Machining & Welding Inc. and an Airgas customer for four years.
Separately Thursday, Airgas reported strong fourth-quarter financial results, with sales up 11 percent at branches open more than a year and earnings per share up 26 percent, excluding certain unusual items, such as last year’s expenses related to the unsolicited takeover attempt.
Revenue for the year ended March 31 was $4.75 billion, up 12 percent. Full-year adjusted earnings per share were up 23 percent, to $4.11 from $3.35, Airgas said. Airgas, which employs 14,000 at 1,100 locations nationwide, boosted its quarterly dividend 25 percent, to 40 cents per share from 32 cents per share.
McCausland said the improved U.S. economy and the momentum at Airgas were among the factors that made this a good time for him to step back a bit, focusing on acquisitions and strategy.
“I have tremendous confidence in Mike. If I didn’t,” McCausland said, “I wouldn’t be dialing back at this time.”
He said the amount of time he would devote to Airgas would decline only a little.
“I would like to take a couple of trips — 10 days, a couple of weeks — without being on my BlackBerry 24-7,” he said. “Some people don’t believe I can do that.”
Contact Harold Brubaker at 215-854-4651 or email@example.com.