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December 22, 2015

Kennebec Technologies owner sells company to employees

FILE PHOTO: AMBER WATERMAN
FILE PHOTO: AMBER WATERMAN
Charles “Wick” Johnson said his company, Kennebec Technologies, will be converted to employee stock ownership starting Jan. 1.

Kennebec Technologies, a precision machining company in Augusta, will be converted into an employee stock ownership plan, effective Jan. 1, owner Charles "Wick" Johnson said Monday.

The company's 65 employees were told of the deal Monday afternoon.

"I conferred with our board. I did not want to sell the company [outright]. Local ownership goes away. Company after company has confronted that," Johnson told Mainebiz on Monday.

Specific terms of the deal were not disclosed. Johnson, who bought the company in 1984, has been the sole owner. That gave him the flexibility to structure the deal in a way that gives employees time to find additional financing.

"Our ESOP has a lot of moving parts," Johnson said. "I'm sole owner of the company, so I'm willing to hold paper. I'll also get cash up front."

Johnson said he was not eager to sell the company, but was persuaded employee ownership could be an option after watching the ESOP transition at GAC Chemical Co. in Searsport.

Susan Scherbel in the Ellsworth office of Bellview Associates oversaw the ESOP process, coordinated with the firm's Bill Haskell. Bellview has offices in Chicago, New York City and Ellsworth. In recent years, it handled ESOPs at Rockland-based Prock Marine Co. and Stillwater-based Sargent Corp.

Johnson, 67, will remain president while making an eventual transition to retirement, though the timing of any retirement has not been set. The company plans to recruit a general manager who can take over many of his duties.

"[The ESOP] gives us a longer time horizon. In the next two to three years, we'll do major positioning so the company can run without me," he said.

The company is well-capitalized and profitable, Johnson said, but hiring a GM will allow the company "to grow aggressively in the future."

Kennebec Technologies has a long history in Maine.

Ed Prendergast launched Kennebec Tool & Die from his garage in 1972. By 1978, it was manufacturing skin dies for Boeing 757s and 767s. In the early 1980s, it produced aerospace parts, including fuel cells for the space shuttle, according to the company history on its site.

Johnson joined the company in 1982 and acquired it two years later. It wasn't until 1987 that the company moved from Prendergast's garage to a 10,000 square foot plant at 150 Church Road in Augusta. It has remained at that site, though the company has since undergone two expansions, and is now in 24,000 square feet. Between 2006 and 2008, it invested $3 million in equipment and technology. The company's name was changed to Kennebec Technologies in 2009.

Today, it serves a range of industries, including aerospace and defense, medical products, semiconductor, telecom and alternative energy.

Johnson was a Mainebiz Business Leader of the Year in 2012 and has been a vocal advocate for small businesses.

Read more

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