Gerhard Kleinmann talks to OPI+ about the decision to sell his company toUSinvestor ITW after more than 25 years of family ownership
At last week’s Paperworld, computer and specialist cleaning product manufacturer Kleinmann announced that it had been taken over by Chicago-based Illinois Tool Work (ITW) for an undisclosed sum.
Gerhard Kleinman, who set up the company in Sonnenbühl, Germany, with his wife Erika in 1979, told OPI+ that although the decision to hand over the reins was a difficult one, he believed it made perfect sense for his company’s future.
"We are growing so fast, we have invented new products, moved further into OP and installed new representatives in foreign countries – I believe we are about to experience a big eruption. We need the money, space and the machinery to grow. An investor was the obvious answer…I’m happy with the deal, it could not have been better."
Kleinmann, which produces specialised cleaning products, automotive products, office products and, most recently, nano products (for office, household and automotive), has grown at a rate of between 20 and 40 per cent annually over the past few years and expects this growth to move into triple digits with the growth in nanotechnology. It registered revenue of €12 million ($14.5 million) in 2005.
But Kleinmann claims that the hunt for a suitable investor was not easy. The company was also in discussion with a number of other potential investors, but some required Kleinmann to cut jobs or relocate, a compromise that was too big for its owner.
"Kleinmann is a family company, with 75 employees including our kids. We obviously want to save jobs and stay in control of our own company. ITW enables us to stay as we are, it allows us that control. In addition, we lose the risk and, if we meet ITW’s targets, gain the financial backing."
ITW, an NYSE-registered speciality equipment designer and producer, recorded sales of more than $11.7 billion last year, giving it a place on the Fortune 200 list. With 49,000 members of staff, it owns more than 650 decentralised, mid-sized companies in 45 countries worldwide, including Kleinmann competitor, US-based Techspray. Kleinmann describes ITW as "the biggest unknown company in the world".
Although Kleinmann will have regular contact with the European division of ITW in London, and is adapting its computer systems so the investor’s Chicago headquarters has a window into the everyday workings of the company in Sonnenbühl, it is agreed that ITW will be a silent partner.
With an injection of extra cash at its disposal, Kleinmann plans to go after its own acquisition targets, most likely in the OP cleaning industry. And looking ahead over the next five years, Kleinmann says the company’s priorities are "tripling sales and developing new products".
But nanotechnology is where he is pegging his hopes. "For the first three years, we will have the market," he said. "China has not figured out how to copy us yet."