Consider Our Name

If your family business is almost 90 years old, what management lesson is top of mind? “This is not a solo deal; it’s a team sport,” says Mike Fiterman, CEO and president of Liberty Diversified Industries (LDI), a New Hope–based holding company.

These days, the team extends well beyond the family, and the goal is to take Liberty Diversified to $600 million in consolidated sales by 2010. The holding company currently comprises five primary operating divisions, whose combined sales were $400 million for the fiscal year that ended in May 2006. Those businesses range from metal fabrication to a state-of-the-art paper mill. (For a complete list of Liberty’s businesses, see sidebar on page 76.) With such a range of operations, it’s no wonder Fiterman emphasizes the need for a committed team with the right talents.

Liberty Diversified had the humblest of beginnings. The original operating company, founded in 1918 by Jack Fiterman, a Russian immigrant and Mike’s grandfather, got its name from the new citizen’s democratic zeal. “My grandfather was so patriotic that he named his company Liberty Carton. He also chose July Fourth as his birthday,” Fiterman says. “And his favorite day? Tax day. It was his day to pay back this country for the freedoms he was granted.” The initial business was the refurbishing of burlap bags and wooden boxes. “It was a one-man company, plus half a horse,” says Mike, because his grandfather couldn’t afford to own a horse outright.

Growth in recent years has been considerably more involved than buying the other half of the horse. Since 1995, the company has completed 14 acquisitions, many of which were add-ons to existing businesses, while divesting three companies. In a conversation about how Liberty will reach its $600 million goal, Fiterman explains how additional acquisitions will—and won’t—play a role.

"The Fiterman name is synonymous with the company, even though the family name is not in the title. Therefore, we recognize that it is more about the kind of people we want to be known as, not just about how much money we're making."

{Q} The day of the bicentennial—July 4, 1976—was a significant date in the company’s history.

{A} It certainly was a day of mixed emotions. On that day, my dad [Ben Fiterman] had a massive heart attack. We all have times when we’re given more responsibility than we think we deserve. This was certainly one of those times. Yet I do think those times can be blessings in disguise, because it forces one to come up to the plate and do something with that responsibility. What that proved to me was the commitment, depth, and passion of our management team. It wasn’t all about Ben. And it certainly wasn’t all about me.

{Q} Of your father’s contributions to Liberty Diversified, what stands out?

{A} Family businesses can have unique chemistries and emotions. In a lot of family businesses, the patriarch, or the first or second generation, has a difficult time giving up that responsibility, because sometimes they feel they are the only ones capable of running the business. I feel myself very fortunate that my father found joy in guiding me to achieve and not needing to do it himself.

{Q} Have you ever considered taking Liberty public?

{A} No. Too many partners complicate a business. More importantly, we feel that it’s a strategic advantage for us to be long-term players—that the businesses we get into oft times don’t pay back for years, but we stay the course. Shareholders in publicly traded companies seem to have a need for 90-day gratification. The other reason is the company doesn’t need the cash.

{Q} But what about liquidity for the family shareholders?

{A} It hasn’t been an issue. I think we’ve done appropriate estate planning so that it won’t be the taxman who requires us to go public or sell the business. The best answer to the question comes from our vision statement, where we intentionally stress privately held. That is our culture. One of our drivers is to be long-term focused. From a value standpoint, the family is here for the business, the business isn’t here for the family. There’s a special legacy to be preserved.