Published Saturday, January 4, 2003
gets new owner
locals are buyers
Herald Business Editor
A local executive team and a Pittsburgh-based investment group said Friday they, along with members of the namesake Hodge family, bought Hodge Foundry Inc.
Terms of the sale, which was completed Dec. 31, were not disclosed. Hodge was a division of Metso Corp. The Finland-based conglomerate had long been rumored to be seeking a buyer for the Hempfield Township company.
As part of the deal, Greenville-Reynolds Development Corp. secured a $1.23 million low-interest loan from the Pennsylvania Industrial Development Authority for the group to buy Hodge.
Founded in 1876, the foundry is the oldest manufacturer in Mercer County, just nudging out Wheatland Tube Co., which was created in 1877.
Commonwealth Capital Group led the buyout group along with four senior managers:
» Joseph D. Simko, president and general manager.
» Richard O. Smith, vice president and manufacturing manager.
» W. Scott Hodge, corporate director and special projects manager.
» Robert Dorfeld II, vice president and finance manager.
Primarily composed of Pennsylvania investors, Commonwealth Capital focuses on buying profitable manufacturing and distribution businesses operating in the state with revenues between $5 million and $25 million. A hallmark of the investment group is to leave day-to-day management in the hands of managers.
That was an attraction for the Hodge executive team, Simko said.
"They're looking at the long term and are seeking to grow the business,'' he added. "We're definitely glad to have them as partners."
Under the new ownership group, Hodge is committed to keeping its reputation in the industry while tapping into new niches, said David Przybylek, managing director of Commonwealth Capital.
"We're looking forward to growing the business in the future,'' Przybylek said. "Hodge Foundry is one of the most respected specialty castings companies in the world. We are pleased to have the opportunity to partner with the management team and the Hodge family, and look forward to working with them to continue Hodge Foundry's 126-year track record of success into the 21st century.''
Hodge executives have started to hit the road to grow the business, Przybylek added.
"We're visiting customers who we have a long track record with and are exploring new markets,'' he said.
One new area Hodge will be looking at is forging large hubs used on modern electric-producing windmills, Simko said.
"That takes a special grade of iron, which Hodge produces,'' he said.
Currently employing 90, in its heyday a couple decades ago the foundry employed about 135. By opening into new markets the hope is to add to the employment rolls, Simko said.
Hodge Foundry is a leading manufacturer of specialty engineered castings used in the mining, power generation, paper, machine tool and plastic injection industries. Capable of creating huge castings with dimensions up to 19 feet and weighing 175,000 pounds, Hodge serves an international clientele. Hodge's products are mostly made of large gray iron, which is a regular cast iron, and ductile iron that has an additive injected into the metal to create more strength.
In addition to Greenville-Reynolds Development and PIDA, Penn-Northwest Development Corp., the Governor's Action Team, First Commonwealth Bank in Indiana, Pa. and Glass, Molders, Pottery, Plastics & Allied Worker International Union, Local 273, were thanked by the buyout group for their involvement in the deal.