Milwaukee-based Paper Machinery Corp. will be employee-owned, as founder Donald Baumgartner announced Monday the company had initiated an employee stock ownership plan.
The maker of forming machines for paperboard cups, containers and packages for brands like McDonald’s, KFC and Starbucks was founded in 1951 and currently has 250 employees in Milwaukee, at 8900 W. Bradley Road.
Baumgartner said he had seen too many companies, including three of his father's, at which there were layoffs or the business was moved out of state after being sold.
“We are deeply committed to Milwaukee and to our employees,” he said, adding the transition to employee ownership “will ensure that Paper Machinery Corp.’s legacy will continue right here in Milwaukee for generations to come.”
Under the plan, eligible employees will earn shares in the company over time. ESOPs are a non-traditional setup.
They involve extensive annual valuations, in-depth employee education and thoughtful management succession planning.
However, their benefits can be immense – including affording the company lower or zero taxes, generating economic growth, engaging employees in the big picture performance of the firm and setting them up for retirement.
The company also announced a leadership transition, with operational control being transitioned to longtime managers Luca Dellomodarme, Scott Koehler and Michael Kazmierski.
Dellomodarme will be chief executive officer. He joined the company in 2003, having previously served in various engineering roles at International Paper.
Koehler currently serves as chief financial officer and treasurer. He joined the company in 1992 after previously working at Ernst & Young and the Wisconsin Department of Revenue.
Kazmierski joined the company in 1974 and currently serves as senior vice president for sales.
Baumgartner and his son John, formerly president of the company, will continue to serve on the board of directors, with Donald as chairman.
“Donald and John will continue to provide their significant leadership and vast experience as members of our board of directors, and will continue to be a great resource to company leadership,” Koehler said. “As Luca, Michael and I step into enhanced leadership roles, we will remain committed, more than ever, to the legacy built by the Baumgartner family.”
Foley & Lardner LLP acted as legal counsel to the company and its shareholders in connection with the transaction, and Chartwell Financial Advisory Inc. acted as financial advisor. Financing for the transaction was provided by JPMorgan Chase Bank N.A. and Cyprium Investment Partners LLC.