Not everyone buys Richard Heckmann's mission: to consolidate the world's water services.
But the chairman of United States Filter Corp. has some influential supporters - and enough investors who believe in him to keep the company's stock price well above sea level.
Investors are betting Heckmann and other company executives can handle the integration of the more than 100 acquisitions U.S. Filter (NYSE: USF) has completed over the last seven years and maintain its lead as the dominant name in the water filtration industry. To believers, the company's acquisition-driven growth from $17 million to $3.5 billion in annual revenue over that period is exhilarating, not terrifying.
Heckmann has his share of skeptics, generally stockbrokers who subscribe to the cynic's definition of a growth stock: a company that grows 20% to 25% per year, until the year it goes bankrupt.
But at least one analyst who covers U.S. Filter has doubts about the sincerity of those skeptics.
"I'm never sure how much of the criticism is real and how much is just what the short sellers are using as a tool to try to get the stock price down," said Jeffrey Musser, a Raymond James analyst.
Heckmann does not always take well to the skepticism. He can get prickly at having to explain his vision to naysayers and bristles at critical news articles.
Take a December story in Forbes, which describes him as a salesman with a dubious product and - although it doesn't use the term - paints him as a con artist.
"You can admire Richard Heckmann's gift of gab without falling for it," the article concludes.
Heckmann, 54, curses upon being reminded of the article.
"A con man!" He kicks his feet up on the desk of his office at U.S. Filter's Palm Desert headquarters. "I just got off Steve Forbes' yacht the other week, and I think they're sorry they wrote the article."
A casual eavesdropper might consider the Steve Forbes reference name-dropping. It's hard not to drop names, though, when the company's directors include Arthur B. Laffer (as in "the Laffer curve") and former Vice President J. Danforth Quayle, or when the company's team-building effort is led by former Notre Dame football coach Lou Holtz.
It's a crowd accustomed to weathering skeptics and the media.
"I think a lot of the people in the press feel the more successful you are, the more they need to attack you," he said.
Heckmann is often compared to Microsoft Corp. founder and chairman Bill Gates - sometimes by Heckmann himself. In a recent interview, the chairman started several sentences with a disclaimer: "I'm not comparing myself to Gates, but..."
The sentences that followed were invariably comparisons to Gates.
Many would argue that the comparisons are valid. Several U.S. Filter analysts see similarities in personality between Heckmann and the king of software. Both are hard-charging leaders whose names are synonymous with the companies they run. Each has a much- assailed vision and a large following. And neither lets criticism stop him.
All are characteristics common to strong corporate leaders, analyst Musser said.
"(Heckmann) is not going to listen to a 27-year-old analyst who just got his MBA about how to run his business," Musser said.
So far, the critics haven't hurt Heckmann or his company. Most of the company's acquisitions now employ more people than before. And the original U.S. Filter operation in Whittier, a filter plant that formed the company's core business before the acquisition frenzy, has blossomed from the synergies of the new units, climbing from $7 million to $30 million in revenue since Heckmann took over.
"The thing about Dick's strategy that has really worked extraordinarily well is that he's one of those evangelistic types of leaders who gets everyone to line up and believe they are on a mission," said Debra Coy, an analyst with HSBC James Capel.
One strong believer in Heckmann's mission is Alfred E. Osborne, Jr., director of the Harold Price Center for Entrepreneurial Studies at the John E. Anderson Graduate School of Management at UCLA. Osborne was one of the first to sign on as a U.S. Filter director following Heckmann's hostile takeover of the company in 1990.
"Heckmann is the right man at the right time," Osborne said. "He has a background in understanding what the investment community understands."
While analysts like Coy and Musser say there is no heir apparent if Heckmann ever bails from U.S. Filter, Osborne thinks the company could handle the transition.
"Heckmann is good at picking his players," he said. "This director is convinced that he's established the management to run the company if he's no longer around."
Heckmann says he's kept the company deliberately decentralized.
"I think we have very, very talented executives who have been given the authority to run their business," he said. "I think 22,000 employees are unmanageable, so we (at headquarters) just manage the problems. That's the only way to do it."
His expectations for the employees remain high.
"I just don't understand someone showing up for work and not trying to knock the ball out of the park," he said.
Heckmann frequently uses sports metaphors, betraying another consuming interest. "If there's a wheel or a ball involved, I love it," he said.
His wife, Mary, recently caught him watching a NASCAR race on one television set and the World Cup soccer competition on another - multitasking even at leisure.
Aside from enjoying sports and business, Heckmann has few pastimes. He says he suffers more stress on vacation than at work, an entrepreneurial characteristic which has driven him since he was a child. Yet when he attended the University of Hawaii, he majored in political science, not business.
"It was the only thing I could get interested in," he said.
There were brief flirtations with politics. He was elected in 1979 as mayor of Sun Valley, an Idaho town of 500 people. But he resigned to avoid a conflict of interest after buying several local businesses. He was a liaison between the White House and U.S. Small Business Administration under former President Carter.
But his defining moments have been entrepreneurial. In 1971, he bought a garage shop that custom-made prosthetics, created Tower Scientific Corp. and turned it into the nation's top maker of custom artificial limbs. He sold the company in 1977 to the Hexcel Corp. for an undisclosed sum he says could have enabled him to retire at 34.
He saw a similar opportunity in water services nearly a decade ago, while a stockbroker for Prudential-Bache Securities in Rancho Mirage. Everyone needs water to live, he noted, but there was an absence of top dogs in the fragmented water industry. The industry was ripe for consolidation, yet most water company executives were engineers more interested in developing technology than in buying it.
So Heckmann recruited investors and staged a hostile takeover of American Toxic Control, a small filtration company. He changed its name to U.S. Filter and started buying competitors.
"I looked over my shoulder the first couple of years. I couldn't believe the industry was letting us do it," he said.
"(Bill) Gates must have looked over his shoulder too, going 'Where's Apple?'"
Name: Richard Heckmann
Title: Chairman
Company: United States Filter Corp.
Age: 54
Residences: Rancho Mirage
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