Rainguard International jumped the gun—in a good way.
The Newport Beach-based sealant maker secured an IndyCar race sponsorship, months before its auto product line’s formal rollout.
“Firestone pulled out of the Texas Motor Speedway, and I happen to know some people in the industry, and they called me to let me know [the sponsorship] was available,” said Chief Executive Claude Florent. “We also are sub-sponsors for the NASCAR races there in April and in November … We’ve got branding all over the track.”
The Rainguard Water Sealers 600 race is scheduled for June 10 in Fort Worth, Texas, and will be the ninth event on the Verizon IndyCar Series’ 17-race schedule. The multiyear deal’s financial details were not disclosed. Speedway Motorsports Inc. in Concord, N.C., which has a market value of about $900 million, owns the venue along with about a half dozen others.
“Eddie Gossage, who’s the CEO for the Texas Motor Speedway, is a really strong entrepreneur, and we connected extremely well,” Florent said. “He’s got a phenomenal staff of people, and they know how to market.”
The sponsorship will promote Rainguard’s “whole new line of products going after a whole new market segment” that’s “designed to protect and preserve the surfaces of a vehicle,” he said, adding that the company is repurposing its “Hydro-Lok” liquid repellant that “sort of sits out there from a marketing perspective. We’re going to wrap it under Rainguard Auto … I’ve already got the ear of four of the top auto retailers that are waiting for me to launch it in the middle of the year, because we’re in the racing.”
Lee Koelfgen founded the company in 1969 and focused on developing surface sealants and coatings that often were part of architects’ “specifications”—required products to be used when constructing or renovating a building. One of its major accounts was Wal-Mart, which stipulated Rainguard’s graffiti coating be put on all of its stores. That made the company very attractive for Florent, who bought it out of bankruptcy in 1997.
“We have some products that they created still in our product line,” he said, adding that the formulations have changed because “we’ve moved to an eco-friendly format… no carcinogens no hazardous byproducts.”
Florent also switched to commercial distribution instead of selling directly to contractors building Wal-Mart stores. Its professional products are now sold nationwide at about 7,000 retail stores, including the Vista Paint, Sherwin-Williams, PPG Paints and Dunn Edwards chains.
Rainguard introduced its “consumer line” for retail sales about six years ago, and longtime customers went from using its products for maintenance to stocking it on shelves for shoppers.
“So now we’re on the building, and we’re in the building,” Florent said.
The company has a robust e-commerce presence—both on Amazon.com and via its own websites. Most of its products are highly concentrated.
“We try to package everything in the smallest quantity possible,” Florent said. “Because of that, we can ship anywhere in the country, and the online retailers can make good money with the product because we’re not shipping a lot of water.”
Rainguard’s annual revenue is between $25 million and $30 million, according to the Business Journal’s estimate.
“Our sales in January of this year are five times greater than they were in January of last year,” Florent said, adding that the company has a production facility in Huntington Beach and plans to keep it that way.
“We’re not going to buy stores and start selling our product through stores,” he said. “And we’re not going to buy chemical manufacturing plant and start making our chemicals.”
Rainguard’s holding company, Florent Group Inc. in Newport Beach, employs about 90. The total includes about 40 from APX PAINT in Anaheim, a paint ball maker the group acquired this month.
“I think they have a very good product, the only one on the market that’s made in the U.S.,” he said. “The issue is just increasing capacity. What I bring to the table is strategic planning and strategic vision. They have all the capabilities, all the equipment, and they know what they’re doing. They’re fully contained—they don’t outsource anything they produce.”
APX also “did not do a good job marketing its brand,” and will now be able to rely on the holding group’s retail connections and its purchasing power for raw materials.
Florent, who describes himself as “a manufacturing person at heart,” in the near future plans to launch Rainguard Marine, a line of products “designed to preserve the beauty of a boat.” A licensing deal is in the works with a “local group of investors” who are “going after a different market segment” and want to sell Rainguard products “branded under a unique name.”
He’s also looking for more APX-like buys.
“I see us acquiring at least two companies every year for the next three years,” Florent said, adding that he’s interested in “anything where it’s an unrealized branded product and the owner needs help. Then we will jump in, and we’ll help them out and develop their brand.”
