MINNEAPOLIS, MN-James Dow, founder, president and CEO of Diversified Plastics Inc., has announced the sale of his company to his employees through an employee stock ownership plan (ESOP).
The employees took ownership on November 1, 2011, but Dow will remain president. “The changeover has been smooth,” says Annette Lund, vice president. “We’re in the middle of a five-year plan and are continuing to follow those long-term goals. It is very important to us to have a seamless transition and maintain continuity for our customers as well as our employees.”
Diversified Plastics is a custom plastic injection molder specializing in high-precision components for medical devices, filtration and aerospace indsutries. Dow and William J. Cullen founded the company in 1977. Cullen, who was already retired, is no longer active in the company. Dive rsified Plastics started production with 13 employees, three injection molding machines, and renting 2,300 square feet of manufacturing space. Today, the company has grown to more than 50 employees with a facility of 45,000 square feet. In 1984, Design Tool & Engineering, Inc. was added as a wholly owned subsidiary of Diversified Plastics to build and maintain all the company’s molds.
“Knowing that someday I would eventually retire and have to sell the company, the most obvious direction would have been to sell to an outside organization,” says Dow. “But, I found that prospective buyers had no desire in continuing the company, their only interest was our customer list and equipment. That meant, in all probability, our employees would be out of work. Setting up the ESOP was meant to prevent that from happening. Our employees are like family to me and who better to lead the new company forward than the people who helped make it what it is today.”
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