Milwaukee-based Oldenburg Group Inc. will sell its mining and defense divisions to New York-based private equity firm J.F. Lehman & Co.
Wayne Oldenburg, the company’s founder and chief executive officer, said the move fits with his pattern of doing business, which has focused on acquiring businesses, building them up and then selling when they are well-positioned.
Terms of the deal, which is expected to close later this year, were not disclosed.
Oldenburg said he will turn his attention to Visa Lighting, the commercial lighting portion of Oldenburg, and to making other acquisitions and investments.
“I would like to do as much as I can in Milwaukee,” he said, adding there is great potential for investment, particularly given recent unrest in the Sherman Park area. “I want to help create jobs in Milwaukee.”
While many of his previous companies have been in the heavy industry and business-to-business spaces, Oldenburg said his future investments won’t necessarily be in those areas.
Visa Lighting, which makes fixtures for commercial and institutional settings, is the only one of the Oldenburg divisions with operations in the Milwaukee area. Oldenburg said he is committed to keeping the company and has no plans to retire.
“I will never sell that one,” he said.
The other businesses were positioned with strong management teams over the past several years and will be able to continue their operations without Oldenburg.
He said the defense business, known as Oldenburg Lake Shore, currently has a record backlog, with products on all U.S. Navy ships and programs. The defense business also has hundreds of millions of dollars in proposals out for programs on which Lake Shore is the incumbent.
The company’s mining division also is positioned well, despite downturns in the industry. Oldenburg sold the coal mining equipment portion of the business to Milwaukee-based Joy Global Inc. in 2006 for $140 million. The remaining hard rock business has expanded into new geographical areas, particularly in Central and Latin America, helping to offset losses in traditional markets.
Oldenburg noted that J.F. Lehman was founded by former secretary of the Navy John Francis Lehman and has a number of admirals and generals within its leadership. While that expertise gives the company a boost in running the defense business, Oldenburg said the firm also has investments in mining.
He said one of his conditions for selling the business was that no employees would be terminated and no facilities, including warehouses, would be closed.
“We’re trying to make sure that all that changes is the shareholder of the company,” he said. “I didn’t even have to raise it with Lehman; that’s the way they approach things.”
Under Lehman, the business will be named Lake Shore Systems Inc. The company designs and manufactures large deck handling equipment, access and lifting systems for Navy ships, and underground mining equipment. It has three facilities in Michigan, in Iron River, Kingsford and Ontonagon. There are also operations in Rhinelander and sales and service sites in the U.S. and Mexico.
“They are an excellent fit with our investment strategy given their leading market positions, long-standing customer relationships and outstanding workforce,” said Alex Harman, J. F. Lehman partner. “We look forward to working with the management team to grow the business organically and through complementary add-on acquisitions.”
