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October 14, 2013
Next 2013

Chris Kilgour's Telford buyout yields surprising rewards

PHOTo / Amber Waterman

Chris Kilgour

CEO C&L Aerospace, Bangor

C&L Aerospace

189 Odlin Road, Bangor

CEO: Chris Kilgour

Founded: 1994

Employees: 120

Gross revenue, 2012: Around $30 million

Contact: 217-6050 www.claerospace.com

One New Year's Eve in the mid-'90s, C&L Aerospace CEO Chris Kilgour got a call from the Solomon Islands, where a previous iteration of his company had opened a fledgling longline tuna fishing business.

"I got a call from this local partner… and he was just going off saying, 'I've got all your stuff here and I'm going to burn it,'" Kilgour says. "We had a manager over there and we got told that he had a price on his head — that this [local partner] was going to kill him. So, we had to pull him out and leave everything there."

Abandoning the operation in the Solomon Islands also meant leaving behind the revenue the company needed to repay a loan totaling hundreds of thousands of dollars. But it was a solution to that conundrum that ultimately created the Bangor aeronautics and aviation company that Kilgour leads today.

Sitting comfortably in a leather chair at the head of a long conference table at his company's Odlin Road headquarters, Kilgour is far from his previous home in Brisbane, Australia. But it was there he had his eureka moment.

"A friend told me that he once knew this guy that sold parts to the [Australian] Air Force," and it was a lucrative business, Kilgour says. He and his partner from the ill-fated tuna venture registered to supply parts to the Air Force. "The first thing we bought were wheels for an F-111 fighter jet."

With no Internet search to come to their aid nearly 20 years ago, it took Kilgour and his partner three months of searching before they could find the right connections. But that first deal netted $35,000 and started the company's foray into the industry where it has made its mark, and recouped the loan on its tuna fishing venture.

Kilgour's entrepreneurial flexibility is evident from the list of business ventures he recalls off the top of his head: live seafood exporting, freight forwarding, American food imports — root beer, Oreos, Hershey chocolate — to Australia, aerial photography and frozen custard stands. The exact chronology of all of those operations is hard to trace.

"A lot of these businesses crossed over," Kilgour says. "If something didn't look like it was going to pan out, I'd want to start something else so I had that going. I always had a few irons in the fire."

But managing the growth of C&L since buying out his founding partner's stake in the company six years ago has taken all of his focus.

Kilgour's airplane maintenance and repair company now brings in around $30 million in annual revenue, has 120 Maine-based employees and offices and warehouses on three continents. Within the next year, the company plans a $5 million expansion at the Bangor International Airport, for which it has leveraged local and federal support. That move will nearly triple the company's footprint, giving it a primary hangar measuring the same area — 40,000 square feet — as all of the offices, warehouse and maintenance space it moved into in 2010.

"We've filled a gap [in the industry]," Kilgour says of the company's focus serving regional airline operators, "and our timing has been good."

Part of that timing has been serendipity. A chance phone call to the BIA — to figure out the logistics of moving a plane from Maine to Australia — informed Kilgour that the offices of Telford Aviation would be closing. After a visit, Kilgour had worked out a deal to buy the operation.

"My intention was not to move here," Kilgour says, but he and his wife decided to give Maine a year-long trial after visiting. "We're still here three years later and probably will be here for a long while."

Since Kilgour took over Telford Aviation in May 2010, the company boosted its revenues by half, up from $20 million before the acquisition. Earlier this year, C&L officially moved its international headquarters from Australia to Bangor, a move that also involved hauling around 12 truckloads of aeronautics parts from a California warehouse. When the expansion of the company's Bangor headquarters is complete — in about a year — it will have closer to 150 workers and the capacity to make inroads in new markets.

Integration

Kilgour's company started its growth nearly two decades ago. Originally supplying parts for the Royal Australian Air Force, it began to purchase other companies and leased a California warehouse to source parts for commercial airlines, like Quantas.

The Bangor acquisition added to his company maintenance and repair expertise, through a core work force whose specialty was servicing the 33-seat Saab 340.

Kilgour says one key to establishing dominance with the Saab aircraft has been building a ready inventory of parts.

"You've got to have that part ready to go when people want it," Kilgour says.

For the Saab and other models popular with regional airlines, C&L houses around $12 million in parts at its Bangor warehouse. Within that building, one group of workers packages orders and keeps products moving out to customers. Another crew enters new inventory at work stations equipped with cameras to record images and detailed information about a part for the company's website, where customers can browse and verify a part's authenticity through serial numbers and other information. The company has two full-time programmers on staff to manage its online inventory and sales systems.

The company also has a warehouse in England and sales offices in Australia, California, France and Romania.

With that network in place, Kilgour hopes to further the company's vertical integration in the coming years, to become a one-stop shop for regional airline operators. The company has worked toward that goal by steadily growing its offerings, which now range from providing aircraft-specific mechanical training to leasing aircraft engines and marketing planes for sale. Late last year, the company secured an exclusive contract to market 23 Saab 340s for sale, a deal for which C&L stands to get a commission and additional maintenance and repair work.

"We'll market them, but then whoever buys them has got to work on them, so we'll most likely get the work for that as well," Kilgour says.

That line of business diversifies the company's revenue stream, which on the parts side requires significant up-front investment. Still, Kilgour sees a gap in his company's offerings that he's hoping to fill within the next year.

"We've sent, in the last year, around 20 aircraft to be painted in other places," Kilgour says. "So, we would have gotten all of that work if we had a paint shop here already."

Earlier this year, the company landed a $579,000 federal grant to help renovate an existing hangar into a full-scale paint shop.

New markets

The company is developing programs to service a line of twin-engine corporate jets — the Hawker 800 — and the larger Embraer 170, which it will be able to accommodate in its new 40,000-square-foot hangar. With both lines, Kilgour sees a distinct need for service, especially with the Hawker, whose parent company, Hawker Beechcraft, emerged from bankruptcy earlier this year and scrapped its jet production and service operations.

"There's a void there that we can move into and help support better," Kilgour says.

Seeking those niches has been Kilgour's life-long obsession, regardless of the industry. At the age of 12 and living in New Zealand, he says he found it difficult to get colored gravel for his fish tank. So he and his father decided to travel to the southern part of the country, buy 100-pound bags of colored gravel and divide them into smaller bags, which they sold at a profit to local pet stores.

"Once you're in business, your mind thinks like that," Kilgour says.

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Chris Kilgour
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