The new owners of Uncle Charley's Sausage are promising not to move the Vandergrift company and to add jobs, even as they look for ways to drive new sales.
Monday's sale resolves some issues for Charles S. Armitage, the 80-year-old founder who had been selling seasonings when he decided to start making his own sausage back in 1988. Mr. Armitage, who will stay on as a consultant for a year, said Tuesday he was packing up his office.
Still, he said he'll have a lot to teach the local investors who don't have much experience in the meat business. "I think the people who bought it are very good people," he said. "I think they'll do well with it."
The new owners -- F.N.B. Capital Partners in Marshall, along with a group of local investors that includes Jim Rudolph and Len Caric -- have the challenge of taking what was a family-owned business and maintaining the strengths of the brand while growing annual sales beyond the $12 million level where they now sit.
"Our intent is to build on what Charley started," said Mr. Caric, who will serve as president and CEO. He and Mr. Rudolph had been partners in McKnight Cylinder, a company that recertified propane tanks, before that was sold. Mr. Caric also spent a short time as chairman and CEO of North Side-based Penn Brewery, while Mr. Rudolph's resume includes both Rita's Italian Ice and Wendy's.
They see Uncle Charley's as a great find and say they are in it for the long term. "It's not a fix," said Mr. Rudolph. "It's a profitable business, doing well."
Financial terms were not disclosed but the sale process was competitive, according to those involved.
Mr. Armitage announced in 2012 that he would sell the company. His son, Charles S. "Chas" Armitage Jr., who had taken over running the business, had been killed in a plane crash at age 52. Other family members weren't interested in taking over the operation.
After word got out, Mr. Armitage received numerous inquiries. Some, he said, were from people who hoped to save the 40-plus jobs there but didn't really have the financing needed to buy a sausage company supplying more than 600 retail stores including Wal-Mart, Shop 'n Save, Bottom Dollar Food and Giant Eagle in Pennsylvania, New York, West Virginia and Ohio.
In early 2013, Pittsburgh investment banking firm Ventura Group was brought in to handle the sale. It took time to audit the company's statements and develop materials, said Bob Ventura, but the bid process began last summer. The company drew about 10 serious offers, including an out-of-state strategic buyer.
For the team at F.N.B. Capital Partners, a pooled fund licensed as a small business investment company that did its first deals last year, the Uncle Charley's situation was in the sweet spot the fund was meant to target -- small businesses that face ownership and succession issues, said managing partner Stephen Gurgovits Jr.
"It's really what we're all about," said Mr. Gurgovits. Many companies, like Uncle Charley's, have created good businesses but don't have family members to take over and their management can't afford to buy them out. Setting up the financing for such deals also can be complicated.
In the Uncle Charley's deal, F.N.B. has about 40 percent ownership, while Mr. Rudolph's group has the remaining 60 percent, said Mr. Gurgovits. Although none of those involved disclosed how much they invested, the official release noted that F.N.B. generally invests between $3 million and $10 million per transaction.
Growing the Uncle Charley's brand is important, but so is keeping it local, according to the buyers. Among the strategic moves going forward will be emphasizing the local nature of the business and the fact that it sources its pork from a supplier in Ohio.
Mr. Caric said there is an opportunity to gain sales by getting into stores within the company's existing footprint that don't now carry the product.
"We developed a brand. It's a very good brand, a very good product," said Mr. Armitage, who joked that he'd need to find a new job.
One of the brand's distinctions -- in addition to the marketing that claims it "just tastes better" -- is that sausage made at the Vandergrift plant is generally in stores within 48 hours, meaning it doesn't need to be frozen.
"This is pretty cool," said Mr. Rudolph. "It's a local company. We're local guys. It's staying local."
Teresa F. Lindeman: firstname.lastname@example.org or 412-263-2018. First Published January 28, 2014 12:28 PM