Loeb to the Rescue of Fulton, New York
Chicago Used Food Processing and Packaging Equipment Company Saves 500 Jobs
CHICAGO (January 9, 2004) - In order to save a chocolate factory, and the local economy of a small New York town, Jim Newman, president of Loeb Equipment & Appraisal Company, a Chicago-based leader in the buying, selling and appraising of packaging and processing equipment, orchestrated two critical deals on behalf of Nestle. The resulting transactions saved more than 500 jobs in Fulton, New York, and garnered praise from New York Senators Hillary Clinton and Chuck Schumer, as well as Governor George Pataki.
In May of 2003, Nestle had announced it would close its Fulton-based factory. By closing the site of one of Nestle's oldest locations, originally opened in 1898, 580 jobs stood to be lost. The close-knit community of Fulton, New York, feared that the hundreds of potential layoffs would be devastating to the local economy.
Originally called upon by Nestle's corporate auctioneer, Biditup!, to sell the equipment piece by piece, Jim Newman recognized the possibility to make a more lucrative deal, not only for Nestle, but also for the city of Fulton by saving jobs. Newman convinced Nestle that if he could auction off the equipment in bulk, rather than piecemeal, it would raise more money. Newman then re-contacted Rich Duffy, of Capital Ventures, who had expressed interest to Nestle in purchasing half of the plant and its equipment but was unable to work out a deal. With Newman's guidance, Capital Ventures then placed its bid to buy half of the equipment for manufacturing low-carbohydrate chocolate.
Also in the bidding race was investor Lion Capital Management Group, a company interested in buying the entire factory, equipment included. With the auction already underway, however, quick action needed to be taken to keep the pieces from being sold bit by bit to other corporate investors. Newman coordinated a separate deal with Lion Capital to buy back more than 70 percent of the auctioned equipment, and also purchase the entire plant.
Now, both Capital Ventures and Lion Capital have made commitments to keep the factory open for the creation of their own brands of chocolate under the respective names of the Fulton Chocolate Co. and the New York Chocolate and Confection Co.
"Our goal was to package the equipment in way to make it easy for the Fulton investors to buy it back, while also allowing Duffy enough time to make his bid," Newman said. "We were given a chance to bring this factory back to life and I'm glad we made it happen."
In the end, Jim Newman's and Loeb's expertise and flexibility created a win-win situation for all the key players. The total revenue from the bulk equipment sale quadrupled the expected auction price, while guaranteeing hundreds of jobs would stay in Fulton. Now, as a third company, Spear USA, LCC, plans to enter the reinvigorated local economy, employment prospects are set to exceed the original 580 employed by the factory.
Established in 1880, Loeb Equipment and Appraisal Co. is the leader in buying and selling packaging and processing equipment to the food, cosmetic, pharmaceutical and chemical industries. With its headquarters in Chicago, Loeb provides certified appraisals, liquidations, and asset management services to its clients. To learn more about Loeb, please visit www.loebequipment.com or call 1-800-560-LOEB.