New ownership structure fuels new direction at Amerequip
Sometimes being good enough just isn’t good enough.
At least that’s how the management at Amerequip felt just two years ago when it made a significant change in ownership. That move has led to substantial growth and diversification for the New Holstein company, which designs, engineers and manufactures custom equipment for the lawn, landscape, agricultural and construction markets.
“We set out with the strategic vision of wanting to diversify,” says Mike Vanderzanden, Amerequip’s president and CEO. “We were looking to be a $100 million company and have 500 employees by 2020. We wanted to create this vision that we wanted everyone to wrap their arms around.”
To implement that vision, however, in 2011, a group of 12 owners (comprised of senior managers and a director) bought out the corporate Employee Stock Ownership Plan (ESOP), which had been in place since 1998. After stockholders got over the first “24 hours of shock,” says Vanderzanden, “from that point forward, it was extremely positive.”
“An ESOP has a time and a place,” Vanderzanden adds. Because of the distribution pay-out that was forthcoming with the ESOP, he says, “We were either going to be bankrupt or forced to sell the company … with the ESOP, you’re (also) trying to manage the risk based on all of the investors. We thought we could make the best decision to grow the company for everyone.”
And that they have. Instead of remaining comfortable and complacent, the new team was more interested with making investments and diversifying the company’s reach, Vanderzanden says.
“The new owners, guided by their board of directors and the executive leadership team, quickly began working on a strategic plan to grow the company’s sales and customer base,” he adds.
“In the first two years, we have increased revenue by 50 percent,” says Vanderzanden. “We’ve also broadened our product line and customer base, expanding work with existing clients (like John Deere) in addition to redefining our strategic approach for revenue growth.”
Tim Dorn, Amerequip’s vice president of sales and engineering, notes that working toward that goal meant focusing “on large OEMs (original equipment manufacturers) that have a global presence and a strong reputation in the market.”
It was also imperative, he felt, to build relationships with customers who share Amerequip’s value. “We want to build a relationship, not just be a supplier,” Dorn says.
Clients new to Amerequip include the world’s largest tractor manufacturer, Mahindra USA, locally based Oshkosh Corp. and construction machine powerhouse Caterpillar. The latter found Amerequip to be a fit based not only on the company’s design and engineering skills, but on something much more important.
“Amerequip’s company values are very similar to Caterpillar’s: integrity, excellence, teamwork and commitment,” says Paul Lam, business manager, BCP Work Tools, Caterpillar. “The Amerequip team ran the project with professionalism and was able to deliver the product on time despite unexpected challenges that surfaced.”
On the road to 2020
To achieve the company’s aforementioned strategic goals for 2020, Vanderzanden says, “We needed to grow at 17 percent a year in order to achieve that … 2013 may fall a little short, but right now, 2014 is already shoring up to be a huge growth year.”
Growth hasn’t been limited to revenue, however. In just under two years, Amerequip has grown its employment base by more than 35 percent. After laying off 50 percent of its workforce after the 2008 recession hit, the company now employs 155 at four locations in New Holstein and Kiel.
Amerequip recently invested $3 million in capital expenditures, including a new 10,000-square-foot remodeling project at the firm’s corporate headquarters and production facility.
Included in the renovation is a training center and conference rooms. By partnering with Moraine Park Technical College in Beaver Dam, Amerequip employees can stay current with the latest production techniques and technology. Four substantial grants received this past year only added to Amerequip’s training arsenal.
“We’re investing significantly in all of our team members,” says Vanderzanden. “Continual education is a critical part of our success, and investing in our employees to ensure we remain on the cutting edge, and relentlessly improving, is vital to our long-term strategies,” explains Vanderzanden. “I don’t want anybody to be left behind.”
To further strengthen its workforce, Amerequip has utilized lean initiatives and Six Sigma methodologies, as well as overhauled its interviewing and on-boarding processes. Vanderzanden adds that Amerequip has a very strong internal referral program. “For me, that validates that people like working here; they respect the company,” he adds.
Creating a positive corporate culture is an extremely important and motivating element in any successful company – especially one that has recently undergone so many internal changes. But Vanderzanden feels it’s just part of doing business.
“We worked very hard for a number of years to get a culture that really promoted success and growth,” Vanderzanden says.
“It’s been an exciting couple of years,” he admits. “Everyone at Amerequip is looking forward to 2013. We see so many opportunities ahead … there are good things on the horizon.”
A CLOSER LOOK
It began with a ‘Snow Bird’
Amerequip’s roots in the custom equipment manufacturing market started in 1920 with unique backhoes and snow vehicles. The company, then known as the Arps Corporation, was well known for its Snow Bird – an over-the-wheel track system with front skis designed for Model A cars. (See a retro picture of the snow automobile.)
Although it was discontinued in 1939, the Snow Bird’s claim to fame was that it was used by Admiral Richard E. Byrd on his expedition to the Antarctic.
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