Janesville heater manufacturer sold
Barry Brandt recently bought the assets of Lenan Corp. from Les and Nancy Marzahl, who founded the company in 1976 and fueled its growth as a manufacturer of waste oil heaters and related equipment.
The company, which has 40 employees in its 80,000-square-foot facility on Capital Circle, primarily makes products sold under the Lanair name.
The company now is known as Lanair Products. It is a subsidiary of Lanair Holdings, a partnership of Brandt and the Chicago-based private equity firm of Aldine Capital Partners.
Brandt sold a precision metal business in Pennsylvania a couple of years ago and was looking for a small manufacturing company to buy.
“My wife and I are both from Illinois, we have big families and were looking to get back to the area,” Brandt said. “It was a life decision.
“It’s a niche business, which I have experience in, and it’s profitable. I wasn’t looking for anything in distress, and it fit our size and geography.”
The company primarily sells heaters to customers who have a waste oil stream and want to lower their heating bills. Examples include car dealerships and fleet trucking companies.
“It’s a seasonal business,” Brandt said. “We like snow and cold.”
It’s also a business that can weather economic turbulence.
When the economy started tanking a year ago, Lenan Corp. held its own, primarily because the company’s product helps customers cut their heating bills, he said.
Brandt still is new to the company and its sector but said he would look for ways to grow the business.
Lanair will explore international opportunities and its Web presence and weigh them against the competition.
“I think there’s more we can do with the Internet,” he said. “Right now, you can’t buy the products online.”
The company primarily sells direct from the factory without distributors. It’s primary marketing channel is direct-mail advertising targeted to specific end users.
Service and support is handled over the telephone, Brandt said.
“We’ll take a look at the model and see if there’s a better way to do it,” he said.
Brandt said the Marzahls are pioneers and innovators in the waste oil heater industry, and the family-like employee atmosphere he inherits is a credit to them.
“This transaction allows for a transition of our business to a highly qualified operator while maintaining its presence in Janesville,” Les Marzahl said. “It also allows Nancy and I to pursue our interests outside of the business.
“We are excited about the transition and look forward to the company growing and prospering in the future under this new leadership.”
Brandt, the company’s president and chief executive officer, said tight credit markets in the traditional banking markets steered him toward private equity markets and Aldine.
“Senior financing is very difficult right now,” he said. “It’s just very hard to do a deal these days.”
Terms of the transaction were not disclosed, but Aldine said on its Web site that it has issued a $4.75 million subordinated note and made a $1.75 million equity investment in Lanair.
Brandt said Aldine would not be involved in Lanair’s day-to-day operations and that he is the controlling shareholder.
“I am excited about the opportunity to follow in the footsteps of the previous owners and look forward to working with the great group of people at Lenan to continue growing the business well into the future,” he said. “My family and I are equally excited about settling in the Janesville area.”