By Molly Burgess on Mar 03, 2025
Original version posted here: https://www.gasworld.com/feature/meritus-texas-assembling-a-platform-business/2151767.article/
Meritus Gas Partners’ strategy to assemble a national network of independent gas distributors has been well-chronicled. The company typically targets large distributors as its anchors in the geographies in which it seeks to grow. These “platform” companies share many of the same traits: a high-quality packaged gas businesses with strong management teams, broad capabilities, and a footprint that could grow with tuck in acquisitions.
When Meritus targeted the Dallas and Houston areas as key areas to plant its flag, it found the landscape was dotted with smaller businesses and lacking a platform acquisition candidate, forcing it to pivot its strategy. Over the course of three years, Meritus has acquired five businesses and is in the process of merging them together to form its platform business in Texas, under the banner Meritus Texas.
“When Meritus approached my sister and me to partner with our family’s business, Mitchell Welding Supply, it had a clear vision in mind,” Rodney Wray, President of Mitchell Welding and the newly formed Meritus Texas, tells gasworld.
“Meritus wanted to assemble a platform business in Texas, centered in the Dallas Fort Worth and Houston areas, by aggregating a group of smaller, well-regarded distributors. Three years on, it now operates 17 branches in North Texas and Houston, with plans for future growth, a fill plant and specialty gas facility, an extended fleet of bulk trucks, and employs about 120 individuals.”
Following its acquisition of Mitchell Welding in December 2021, Meritus acquired the assets of MagneGas Welding Supply – South in Texas and Louisiana and inherited seven retail locations and a recently expanded fill plant and specialty gas laboratory in Tyler, Texas. At the time, Mitchell had three locations and operated a limited fill plant.
“The MagneGas facilities fit with our locations and extend our reach into East Texas between the Dallas-Fort Worth metroplex and Shreveport, Louisiana, served by MagneGas. Forty new associates joined the team, too,” says Wray.
Jered Ruyle, President of MagneGas, was included in that number and has now stepped into the role of Vice-President of Operations for Meritus Texas.
“Airco’s locations complemented Mitchell’s footprint.”
“The two companies complemented each other really well,” Ruyle says. “Mitchell had a strong sales team and market presence ahead of the deal, while MagneGas provided the advanced fill plant capabilities to help grow the bottom line and improve reliability.”
Later, in January 2024, Meritus added a more concentrated presence in the Dallas-Fort metropolitan area with its acquisition of Airco Gases Southwest. Founded in 2020 with the acquisition of independent distributors Welders Warehouse and Allied Welding Supply, Airco had rapidly grown in the Dallas-Fort Worth region.
“Mitchell Welding was already successfully operating in the stretch of East Texas between the Dallas-Fort Worth metroplex and Shreveport, Louisiana,” says Jeff Palmer, Airco’s President and now Vice-President of Sales for Meritus Texas. “But Airco’s locations complemented Mitchell’s footprint to the west.”
Meritus furthered its north Texas build-out with the acquisition of Ward Welding in August 2024. Ward Welding operates two locations situated on the northwest side of Fort Worth in Saginaw and Springtown, Texas.
“Ward Welding had operated in Springtown since the early 1900s and is known for its commitment to quality and customer service,” says Palmer. “Adding Ward extended our reach to the northwest. Moreover, Ward’s full-service fill plant supplements MagneGas’ Tyler, Texas plant and provides Airco and Mitchell with redundancy of product supply.”
Meritus’ first foray into southern Texas was through its September 2024 acquisition of Houston-based Gulf Coast Gas.
“Gulf Coast Gas is a great fit for Meritus,” says Wray. “It operates a gas production and distribution facility and retail store that will support our growth in southern Texas, Houston, and the ship channel.”
Meritus’ signature is that it allows its partner companies to continue to operate independently and maintain their legacy brands. In the case of Texas, however, the local leadership has decided to forego the use of individual company names and brands in favor of adopting the Meritus name for a newly formed platform business.
“All five of these partner companies have distinctive brands and are well-known in the local markets they serve,” Wray explains. “But their reach was limited. More importantly, while we could have maintained each of these companies’ names, we are a large business now with a broad footprint. It did not make sense to limit ourselves by hanging onto our local brands.
“We want to build a ‘one company’ culture, and that would be difficult to do while maintaining five different identities.”
Wray explains that accepting the Meritus name reflects the Meritus culture and co-ownership, too.
“All of us are owners of Meritus. As owners, we need to do what’s best for the enterprise, not necessarily what we want for our own personal reasons or emotions. Partnership means putting Meritus and your partners first. And what’s best for all of us is to combine these businesses into one regional distributor with one name.”
Setting up the organizational structure and delineating roles and responsibilities could have been an emotional endeavor but has naturally developed as the companies have combined over time.
“The businesses were culturally compatible, as were their owners. We all have long histories in our industry and have developed our own competencies. We complement one another and learn from each other,” Wray explains.
But integrating five businesses is no easy task.
“We have a thorough integration plan and are making strides each week to realize our vision of a fully integrated business from a back office, operations, and sales perspective,” Wray says. “We want to move with deliberate speed and without compromising our service to our customers.”
“This process of bringing together similar types and sizes of business has prompted us to examine all of our standard operating procedures and the way we’ve each traditionally managed our businesses while also gaining insights into how others run theirs,” Ruyle adds. “The key is to take the best processes from each company and not be wed to the way each of us has conducted business.”
Operating as a bigger regional business with the backing of Meritus instantly comes with advantages.
“We are in a capital-intensive business. We’ve always understood growing requires capital, but for a smaller independent company access to capital is challenging. Historically, it’s always been about figuring out where to get the best value and what makes the most sense,” Ruyle says.
But the small business capital struggles that once held back these businesses were transformed when they became part of Meritus.
“It has been a big change and a welcome one. If we can demonstrate a strong justification and return on investment, Meritus is willing to support us financially,” Jered says. “This has really expanded our opportunities – both in how we compete and what we’re able to achieve.”
Before joining Meritus, taking on a customer that needed nearly $1m in asset purchases would have been impossible, for example. Now, the company has the backing to serve larger, regionally based customers across multiple markets.
Mitchell Welding had been serving the DFW Metroplex for over 40 years but with a traditional industrial gas focus. Combining with its new partner businesses has broadened the markets it now serves and the products it can supply.
“MagneGas’ business in the east, around Shreveport, is heavily focused on oil, gas, and petrochemicals. Moving west to Longview, Tyler, Palestine, and Henderson, we primarily serve natural gas customers who use pressure vessels, ASME tanks, and steel storage tanks. Further west, in Dallas, our presence now expands into the medical sector with Airco and Ward Welding, which has become a major focus for us,” Wray says.
“Traditionally, we’ve been a metal-fabrication-focused business with a strong emphasis on hardgoods. But, in recent years, we’ve realized the need to shift towards becoming a gas-centric company, with a focus on bulk, medical, and specialty gases.”
Palmer adds to this and says that Meritus Texas sees particular demand from the specialty gas market and is pivoting to meet these needs. As a first step, he says the company hopes to make the most of the capabilities of its partners.
“Our focus will soon shift to Houston as we integrate into the Gulf Coast gas business and expand in that market. Houston is one of the top specialty gas markets in the US, and that’s exactly where we’re heading.”
“In the near future, we’ll be expanding our specialty gas lab further.”
The MagneGas fill plant helps with the company’s ambitions in that market. When MagneGas developed the plant, specialty gas was the main reason why.
“At the time, we made sure to invest in the necessary equipment, as it would be essential for reaching a higher level of purity in specialty gas production,” Ruyle adds. “Many industries rely on calibration gases as standard, so if we were going to grow and truly differentiate ourselves, this was the path to take.”
For mixes that the company can’t produce in-house, it plans to leverage the expertise of other Meritus partners, such as Global Calibration Gases.
This has already happened, in some respects, as Ruyle details.
“Recently, we had a customer that needed very specific calibration gases – something we’d never dealt with before. With the expertise of some of the Meritus partners, we were able to source and supply it quickly. This means they can turn to us for everything and not have to rely on multiple suppliers.
“In the near future, we’ll be expanding our specialty gas lab further, too, allowing us to move beyond just producing 5.0 purity argon, helium, nitrogen, and hydrogen. We’ll be able to produce parts-per-million mixes and specialized blends, not only to serve our own customers but also to support other Meritus platform companies.”
Source: Gasworld