Now armed with up to $10 million in private equity for acquisitions, AmeriSource Industrial Supply Co. said it’s poised to increase revenue 600 percent in the next five years.
President Lou Ray said he expects revenue at his Detroit-based company to grow from a projected $25 million this year to $125 million by 2020 as AmeriSource plans to acquire companies in the Midwest.
“The private equity investment (from Detroit-based American Revitalization Partners) that closed this past Friday, that will enable us to make acquisitions in the center of the country down the Mississippi River,” Ray said.
AmeriSource, a supply business that provides everything from office supplies to toilet paper, is the result of a merger between Michigan Glove and Safety Supply Co. Inc. of Bloomfield Hills and Veterans Supply and Distributing Co. Inc. of Hamtramck.
The equity investment is the latest in a series of moves for Ray’s company, which relocated all 82 employees from a 38,000-square-foot building on Vincent Street in Hamtramck to the 180,000-square-foot former Packard marine engine plant at 1600 E. Grand Blvd. on Detroit’s east side.
Ray’s real estate investment company, Spenconoli LLC, bought the building in December 2013 for $550,000. During World War II, no fewer than 70,000 Merlin engines were churned out there after Rolls-Royce struck a deal with Packard to build them because the British automaker couldn’t keep up with production.
The total build-out is expected to cost about $250,000, Ray said.
The Vincent Street building is being cleaned and will be put up for sale, he said.
AmeriSource leases about 100,000 square feet in the Packard marine building, which was constructed in 1923, according to CoStar Group Inc., a Washington, D.C.-based real estate information service. The company can expand largely as needed because other tenants in the building are on short-term leases.
Other tenants along with AmeriSource include Arte Express Detroit LLC, the company owned by Fernando Palazuelo, who plans to redevelop the 3.5 million-square-foot Packard plant in a mixed-use project that’s expected to cost $120 per square foot or $420 million.
Palazuelo, a native of Spain who has been developing historic but dilapidated sites in Peru since losing everything in the recession, purchased the Packard plant in a Wayne County tax foreclosure auction for $405,000 in 2013.
Also leasing space in the building are Fenkell Automotive Detroit Inc. (18,000 square feet),Answer Technology Group Detroit LLC (6,000 square feet), Elba Laboratories (1,500 square feet) and Velox Disposal Inc. (1,000 square feet), Ray said.