By TROY L. SMITH - 8/17/2012
Zeller Corp., a controls and automation products distributor founded in Rochester 51 years ago, will be under new ownership with a goal of ramping up its growth.
Connecticut-based Kaman Corp. announced this week that subsidiary Kaman Industrial Technologies Corp. had reached an agreement to acquire the assets of Zeller for an undisclosed sum. Kaman, a publicly traded company, expects to close the deal in the third quarter.
Zeller has its headquarters in Rochester and offices in Buffalo, Syracuse, Foxboro, Mass., and Winston-Salem, N.C. The company has 240 employees, with approximately 180 in Rochester.
Gary Haseley, CEO of Zeller, will join the Kaman subsidiary's executive management team as Zeller's vice president and general manager. Haseley, who had a majority ownership in Zeller, said talks with Kaman began earlier this year.
"We were not looking to sell the company before that," he said. "We had a discussion with the senior management team at Kaman. It shocked us at what a great cultural fit it was and how much we had in common in terms of our core values and culture."
Zeller will maintain its headquarters here, Haseley said. The company changed its ownership to increase its growth rate.
"This expands our capital and also gives us access to a broad sales team from a geographical standpoint," he said. "We've invested tremendously in our headquartered facility in Rochester. We're not going anywhere. Our goal is that we will expand our operation in time."
Kaman does business in the industrial distribution and aerospace markets. The company operates more than 200 service centers and five distribution centers in North America. It has 4,800 employees and had sales of $1.5 billion in 2011.
Zeller has a long history in Rochester. The company was founded by Henry Zeller in 1961 as Zeller Electric, a general line electrical distributor. His son, Eric, took over the company as sole shareholder in 1986. The company expanded into Buffalo in 1990.
During the 1990s, Zeller Electric evolved with technology, integrating value-added projects while partnering its electrical engineers and technicians with its customers to develop scalable products and services in automation controls.
In 1998, Zeller Electric bought Victor-based Vortex Controls Inc. and Toronto-based Control Digital Inc., which led to the start of a new division at Zeller, Zynergy Solutions. The same year Zeller Electric opened an office in Syracuse and formed Zeller Corp., parent company to its Zeller Electric and Zynergy Solutions branches.
In 2001, Haseley helped lead a team of company officials in acquiring Zeller Corp. from Eric Zeller. At the time, Zeller Corp. had 62 employees.
Haseley and his team went on to expand Zeller's design, manufacturing and assembly services. During the three years prior to the change of ownership in 2001, Zeller's revenue had grown from $24 million to $32 million.
By 2005, revenue had grown past $50 million. Haseley said Zeller expects sales in 2012 of approximately $80 million.
Zeller is the second acquisition for Kaman's KIT subsidiary in less than two months. In July, the company acquired Miami-based Florida Bearings Inc., a distributor of bearings for power transmission and pump products.
KIT also acquired certain assets of Texas-based Plains Bearing Corp. last October and Massachusetts-based Target Electronic Supply Inc. in September.
Standard & Poor's Financial Services LLC affirmed its stable corporate rating of BBB- for Kaman this week after the announcement of the Zeller acquisition. In its report, the ratings firm said Zeller will bolster Kaman's distribution business by expanding its product capabilities in the industrial distribution segments of electrical, automation and motion control.
"We are excited to welcome the strong management team and workforce at Zeller, led by Gary Haseley, to the Kaman family," said Neil Keating, president and CEO of Kaman, in a statement. "The Zeller team will enhance our ability to serve our customers and will bring a number of new tools and capabilities to the Kaman organization.
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