Casselton, N.D.-based Loegering Manufacturing Inc. is being acquired by a Grand Rapids, Minn., equipment manufacturing company, it was announced late Monday afternoon.
Publicly traded ASV Inc. will pay a combination of stock and cash for Loegering, a 33-year-old family held company and the largest manufacturer in Casselton.
Loegering's 60 employees were informed of the impending sale Monday afternoon by ASV President Gary Lemke and Loegering President Brad Williams.
While Loegering is known for its over-the-tire track systems for skid-steer loaders and other construction equipment, ASV is known for rubber-track systems and rubber-track equipment.
ASV, publicly traded on the NASDAQ market under the ticker symbol ASVI, was founded in 1983 by Lemke and Edgar Hetteen. Hetteen is considered the "grandfather" of snowmobiles, having founded both Polaris Industries of Roseau, Minn., (in 1945) and Arctic Cat of Thief River Falls, Minn. (in 1961).
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Caterpillar Inc. (NYSE:CAT), a major ASV customer, today owns one-fourth of ASV stock. ASV earlier this month projected 2004 sales would top $140 million.
Loegering is on pace to reach between $16 million and $20 million in sales this year, Williams said.
Lemke said ASV has been watching Loegering for some time, not so much as a competitor but as a complementary company.
"We've actually been a customer of theirs," Lemke said of Loegering. "Loegering is an extremely strong name in the traction industry. They have good products, good distribution and good employees."
Loegering was founded by George and Marilyn Loegering. At the heart of the business were patented "steel crawler" tracks developed for skid-steer loaders by Marilyn's father, Louis Keller.
Louis and Cyril Keller, blacksmith brothers from Rothsay, Minn., invented the skid-steer loader, a concept they sold to and developed for Melroe Corp., today known as Bobcat.
They developed the Loegering business at Larsen Welding & Machine in Fargo, with Elmer Larson, and moved the business to Casselton in 1973.
The Casselton plant today is next to the "old can pile" just off Interstate 94 at the Casselton exit.
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George Loegering, retired from Loegering, recalled Monday that the business was teetering on the edge in the early 1980s, before a wet spring spurred a demand for track systems. Sales were so good they could pay off a bank balloon payment.
"We kind of got bailed out by rain from heaven, you could say," he said.
Marilyn Loegering, aided by the company's board of directors, negotiated most of the deal with ASV. Her initial reaction to being approached was that the company wasn't for sale, she said Monday. Negotiations warmed up once she learned more about ASV. She said ASV shares many of Loegering's character and values.
In addition to its over-the-wheel track systems, Loegering produces skid-steer loader attachments. And later this year the company will introduce its so-called Versatile Track System that converts tire-equipped loaders into rubber track loaders.
Lemke said he anticipates the sale of Loegering will be completed in the final quarter of 2004.
"Loegering, like ASV, has strong entrepreneurial roots," Lemke said. "Loegering is a very strong brand, and we want to retain that brand."
Lemke said it's possible employees could be added at the Casselton plant. ASV outsources production of some of its parts to other companies and could move that work to Casselton, he said.
Loegering sells its track systems and attachments through a network of more than 800 independent dealers throughout North America.
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Steve Loegering, George and Marilyn's son, who is manager of products and process, and their daughter, accountant Wanda Mangin, will remain with the company. Williams will continue to oversee day-to-day operations at the Casselton plant, Lemke said.
"ASV is a dynamic, fast-growing company that can help Loegering take the next step," Williams said. "We look forward to a strong partnership that will benefit both companies."
Readers can reach Forum reporter Gerry Gilmour at (701) 241-5560
