ATC Venture Group to purchase K-W Manufacturing
Thursday, August 16, 2012
By Gabe Licht, Daily Reporter Staff
"We plan to acquire at least a company a year that would fit and grow what we have here," ATC Venture Group CEO Bob Davis said following the sale of the Cycle Country ATV accessories product line on Dec. 31, 2011.
ATC has continued operating Simonsen Iron Works in Spencer and announced an asset purchase agreement with K-W Manufacturing Company on Friday.
The Sioux Falls-based manufacturer produces patented snow plows, dozer blades, rock pickers and other attachments for the skid steer loader market. According to a release, the purchase includes "equipment, contracts and associated good-will in consideration for an aggregate purchase price of $500,000 and a royalty agreement of 5 percent of sales of the KW product line for each of the next five years."
Davis believes the purchase seems like a natural fit.
"They make snow plows just like we've always done, except it's for the skid steer market instead of the ATV market," he said. "It gets us in the door in the skid steer loader category, which is different than the ATV attachments we've been making for 30 years."
Simonsen Iron Works continues to manufacture a limited amount of Cycle Country accessories for Kolpin Outdoors but primarily manufactures products for medium and large companies such as John Deere.
Purchasing KW "overlaps customers and manufacturing capabilities, yet it adds new customers and has some different products," Davis said, adding, "It's a safe progression in the product types we make and a safe progression of the customers we work with."
Davis estimates the current Simonsen Iron Works workforce to be between 50 and 60 employees, compared to a seasonal peak of 105 last year.
"The capacity is there, the employee abilities are there, the culture is there and the reputation for quality and on-time delivery are there," Davis said. "We have all the ingredients. Now it's time to put it all together with something that is compatible with what we bring to the table."
Davis also addressed a notice from the NYSE American Stock Exchange that stated the company is below certain continued listing standards.
"Of all the companies on the NYSE, we're a really little one," Davis said. "There are technical, minimum requirements. Sometimes we trigger them and get back into good graces. ... The company is considering the proper options to make sure we correct the issues they've pointed out."
