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Iowa Firm Buys Vermont Castings



Thursday, October 02, 2014
Randolph — Only 14 months after the company was taken over in a management-led buyout, Vermont Castings has been sold again — this time to HNI Corp., an Iowa-based wood-burning stove, fireplace and office furniture manufacturer.

Vermont Castings, which employs about 200 full- and part-time workers at a foundry in Randolph and assembly plant in Bethel, is part of Paris, Ky.-based Vermont Castings Group. Wednesday’s announcement is the latest twist for the stove maker, which has passed through three different owners in the past six years.

The company’s management team, led by Chief Executive Officer Ricardo Leon and Chief Financial Officer Jacob Reuben, acquired Vermont Castings Group from private-equity firm The Riverside Co. in August 2013. Riverside had acquired the assets of Vermont Castings in 2008 after its parent company, Ontario, Canada-based CFM Corp., filed for bankruptcy earlier that year.

Terms of the all-cash sale were not disclosed, but HNI Corp. said in a news release that Vermont Castings Group has revenue of about $100 million a year and that Leon will “continue in his role” with the new owners.

“Looking to strengthen our hearth strategy and brand is the primary purpose for buying this company,” Matthew McGough, vice president of corporate finance, said in a telephone interview. He said HNI had considered buying Vermont Castings on at least three previous occasions, but it “hadn’t met the (financial) criteria we were looking for.”

But he said the sellers have turned around Vermont Castings to the level that it fits the financial profile HNI requires in acquisitions. “The last owners have done some nice things with the business,” he said.

McGough said HNI has “no initial plan for any layoffs or restructuring. Our intent is to run these businesses as they are today.”

He added, however, that HNI continually reviews operations, noting that Randolph and Bethel are “nine miles apart,” and that improving performance and efficiency is “always something we’re looking at.”

Leon did not respond to phone messages seeking comment.

Publicly traded HNI, which reported revenues of $2.1 billion in 2013, manufactures wood, pellet and gas stoves and fireplaces under the Heatilator, Heat&Glo, Harman and Quadra-Fire brands. It also owns the FireSide Hearth & Home hearth products and service outlets. Hearth products accounted for $400 million, or 18 percent , of HNI’s 2013 sales, according to company financial filings, while office furniture products accounted for $1.7 billion, or 82 percent .

HNI said Thursday that Vermont Castings is expected to provide a “nominal” profit to the company’s earnings in 2014 and “positively contribute” to earnings in 2015.

In July, at a ceremony in Randolph attended by Gov. Peter Shumlin and Vermont Economic Development Commissioner Lisa Gosselin, Vermont Castings trumpeted the return of some of its manufacturing to Randolph and Bethel facilities and from plants in Mexico and China.

“This is a terrific example of how more and more companies are recognizing the value and work ethic in the Vermont workforce,” Shumlin said in prepared remarks.

John Lippman can be reached at 603-727-3219 or jlippman@vnews.com.