'Little Guy' Orbit Valve seeks bigger partner.

For 85 years, Ed Ligon Jr.'s family-owned business, Orbit Valve International Inc. of Little Rock, has competed with larger companies and often won.

But Ligon understands the realities of competition in a global economy. So he and his board of directors decided late last month that this is the right time to seek a buyer.

"There's been a tremendous amount of mergers and consolidations over the last five or six years, not only with the manufacturers such as us but also with many of our customers overseas," Ligon says. "And we're just the little guy.

"We used to compete with about six companies that were probably bigger than we were, although they weren't a lot bigger. They've consolidated now basically to two companies and they are divisions of larger companies."

By February, Ligon anticipates that any one of 20 large international companies will acquire Orbit Valve. That's how many firms have received an offering circular prepared by Orbit Valve, which makes high-performance valves for the oil and gas industry, and its investment banking firm, Simmons & Co. International of Houston.

"They operate very quickly in our industry with the merger and acquisition people," Ligon says. "And any company is in a state of unrest when you know you're going to sell and the big question is who to. Everybody is kind of on the edge of their seat.

The more you can condense that time, the better off everyone is."

Ligon, a young-looking 64 years old, wore an open-collared casual shirt last week as he sat in his moderately furnished office at Orbit Valve's corporate headquarters in southwest Little Rock. The room includes several statutes of cowboys, a reminder of Ligon's Oklahoma upbringing.

He has guided Orbit Valve for 33 years, ever since the firm moved from Tulsa to Little Rock in 1964. It has grown from about 100 employees and sales of about $3 million in 1964 to 500 employees worldwide with more than $80 million in revenue last year.

Orbit Valve has offices in the United States, Canada, England, the Middle East, Singapore and Australia. It also has customers throughout South America, Europe, Scandinavia, Africa, India and the Orient.

"Orbit is a fine outfit and is regarded by their competitors, domestically and worldwide, as very tough competitors," says Steve Larkin, president of the Valve Manufacturers Association of America. "Ed Ligon has a well-recognized product line and a very successful business.

"This will be a win-win situation for Orbit and whomever lines up with them."

On the morning of Oct. 29, Orbit's board decided to sell the company. By that afternoon, the 400 employees in Little Rock had been told of the decision.

"We really felt like this was the right thing to do, to get it on the table [for the employees]," says Shannon Ligon, Ed Ligon's daughter and Orbit Valve's vice president of human resources. She works for Andersen Consulting, a division of the accounting firm Arthur Anderson, but is helping Orbit Valve through the sale process. "I believe it is the best move for Orbit and the employees."

Ligon, who was granting his first-ever interview about Orbit Valve, says he's been pleasantly surprised at how the employees received the announcement.

"They were surprised, shocked and some disappointed," he says. "But we have great products and we have good people here. We just don't expect things to change much."

Mike Fitzpatrick, Orbit Valve's marketing manager who has been with the firm for 14 years, says the employees realize Ligon's decision "makes a tremendous amount of sense."

"Obviously there's concern for people who see change; most people don't like change," Fitzpatrick says. "But this is intended to be a change for the better. Somebody made the point that [Ligon] has been our leader for a generation and everybody has great trust in his judgment."

Similar Values Sought

Ligon emphasizes that Orbit Valve won't necessarily take the highest bid for the company. The new owner must share some of Orbit Valve's same values and principles, he says, such as total customer commitment, absolute quality, the well-being of the employees and a willingness to invest in Orbit's facilities and processes.

"We think that it is really important to continue to operate this company with the success that it's had in the past," says Ligon, a deeply committed Christian. "We are very, very dedicated to our customers. We really care about our people."

Ligon didn't discuss Orbit Valve's finances in detail, other than acknowledging that it did more than $80 million in revenue. But he does admit that the company is doing well and this year may be its best ever.

"You've heard a lot about restructuring, reengineering, total quality control," he says. "We started that in 1991 and it's a long-term process. We've made a lot of changes here and as a result we're very profitable in today's market."

It's impossible to determine how much a buyer will pay for Orbit Valve. But Business Valuation Services of Dallas estimates that some of the recent acquisitions in the valve industry have brought prices ranging from 70-85 percent of a company's annual revenue, although much more than that goes into determining a sale price. In Orbit Valve's case, that means its sale price could be between $58 million-$68 million.

Ligon doesn't plan to remain in a management role after Orbit is sold. He says his son, Chris Ligon, manager of the firm's TruSeal plant on 65th Street, wants to stay.

Ed Ligon will devote his time to other interests such as CrimeOut!, the crime-fighting program he directs for Fifty for the Future. He'll probably keep up with hobbies such as snow skiing, sailing and golf.

"I'm tired," he says. "I hope to remain in an advisory capacity [with Orbit Valve]. What that would entail obviously is pretty much up to the buyer."