LOWVILLE — A group led by a Rochester investment firm has acquired Climax Manufacturing Co. through a deal using $6.9 million from a state pension fund program.
DeltaPoint Capital Management on Friday announced that Climax Acquisition LLC — an investor group led by the firm, along with "key Climax management" — had been formed to purchase all of the family-owned company's capital stock. Investment firm Hamilton Lane of Philadelphia, Pa., is a co-investor, using the funding from the state Common Retirement Fund's In-State Private Equity Program.
State and company officials say the deal will boost the 104-year-old company's capital investment and growth plan, which is expected to create new jobs over the next several years.
"I can't think of a better investment opportunity," state Comptroller Thomas P. DiNapoli said during a Friday morning announcement at Climax headquarters on Route 26 just north of the village.
Citing the company's rich tradition and history as an environmentally friendly manufacturer through its use of recycled materials, Mr. DiNapoli described the deal as "creating the opportunity for the deep roots here to grow even deeper."
"We want to thank the comptroller for not only talking green but bringing the green," said state Sen. Joseph A. Griffo, R-Rome.
He commended Climax's employees for making it a company worth investing in.
State Sen. Darrel J. Aubertine, D-Cape Vincent, and Assemblywoman Dierdre K. Scozzafava, R-Gouverneur, also spoke, both during the formal announcement and beforehand in a meeting with company employees.
Company management will remain intact, with Chief Executive Officer Patrick J. Purdy and company President Lisbeth Hirschey continuing to oversee operations, said Ms. Hirschey, a member of the fourth generation of Hirscheys to operate the papermaking and packaging company.
"It think it's exciting," she said after the announcement. "We have some pretty aggressive growth plans."
Company leaders last year began looking for ways to expand the operation, particularly after starting work on a five-year strategic plan, Mr. Purdy said. However, since Climax has been a north country business for 104 years, it was important that any investors have "the same commitment to the north country," he said.
In that respect, DeltaPoint "fit our needs," Mr. Purdy said, adding the firm will provide not only money but also business acumen.
As for the timing of the move, the CEO noted that brothers Lee T. and Urban C. Hirschey, who essentially ran the company for more than 45 years, are both in their 70s and looking to retire.
The state's investment "just sweetens the deal," Mr. Purdy said.
"This is a good investment for my retirement money," said Lewis County Treasurer Vicki A. Roy, who attended the announcement.
Through its In-State Private Equity Program, the retirement fund invests with private equity managers who in turn invest in state companies that require capital for growth. The program is designed to provide investment returns consistent with the risk of private equity while expanding the availability of capital for state businesses.
Since 2000, a total of $330 million has been invested in 114 companies through the program.
And with $530 million still available, Mr. DiNapoli said, he is "looking for more opportunities" to invest in state companies.
Samuel L. Hirschey in 1902 founded the Climax Incubator and Brooder Co., which produced incubators designed specifically for hatching chicken eggs, in Castorland, and the company was incorporated in 1904. About 10 years later, it began to make fiberboard cheese drums, then branched out to other folding-carton applications.
Climax's paperboard division, now in Lowville, produces uncoated recycled board used in the graphics art industry and produces one-third of its electricity needs from hydroelectric power. The packaging plant manufactures folding paperboard boxes found in many specialty retail stores and supermarkets.
The company also operates a papermaking mill at 30 Champion St. in West Carthage and a warehouse facility in Syracuse. It has 262 full-time employees.
