The story of Cadillac Culvert is an inspiring tale of how community members from several different areas and industries came together to save the jobs of their friends and neighbors. Between co-owners Don Aldrich and Chuck Thomas, they have over 60 years working in the corrugated metal and the underground concrete industries. Don and Chuck’s journeys started right out of high school. Don got a job at a metal culvert business and Chuck at a concrete company. With a lot of hard-work and dedication, they worked their way up. Both became plant managers in their respective fields, at a company called Premarc, a concrete and metal manufacturing business, at their manufacturing facility in Cadillac, Michigan.
Don had been working for Premarc for 18 years and Chuck for 22 when the business filed for bankruptcy in November 2011. Don and Chuck immediately knew they wanted to save the plant and the 7 jobs of their staff. “The plant,” said Don, “had been running well, but Premarc did not invest in the plant to grow the business.”
Chuck contacted a commercial banker about a loan to buy the business and the banker immediately told him, “You need to contact the SBDC.” So, Don and Chuck went to their local Chamber of Commerce and ran into Annie Shelter, business consultant with the Michigan SBDC, who happened to be at that location. Annie went to work helping Don and Chuck find the necessary financing to buy the business. She told them that the first thing they needed to do was write a business plan for a lending institution. She outlined the information a bank would look for and how to organize and present the information. Annie also brought in Finance and Strategy Specialist Joe Batteiger to assist with looking over the plant’s financial statements and projections.
“The bankers really did not know anything about our business, so Annie and Joe really helped us explain our business to the banks. They knew what the banks wanted. They gave us the outline of a business plan and helped us fill in the banks,” said Aldrich. “We had always been a part of the business, but had not really done a lot of the business administration part. The Michigan SBDC helped us find a lawyer and accountant for our management team which was great, because we did not know where to start.”
The SBDC consultants collaborated to help Don and Chuck with preparing their proposal. Annie helped them identify the plant’s strengths, weaknesses and assisted with organizing their proposal to emphasize those strengths and minimize the weaknesses. Joe worked with Don and Chuck on their cash-flow analysis and pro-forma projections to make sure they would satisfy the requirements of the bank.
Even with extra resources, timelines were essential as Don and Chuck had to move quickly while Premarc was in bankruptcy court. In less than six weeks, they had a business plan and loan proposal in hand when they approached a local bank.
“There was no delay when we took the plan to the bank. They wanted to do the deal,” said Aldrich. “Annie and Joe suggested one of the SBA’s loan programs to the bank to help get the deal done. We never knew there were those options out there, even the bank did not know about the program.”
The SBDC referred Don and Chuck to the Darlene Marlette at the Michigan Certified Development Corporation and the SBA 504 loan program. The SBDC even sat in on conference calls with Darlene, Don and Chuck to connect the groups and help explain the situation with the business to make sure they were setup for the program. Annie and Joe kept encouraging Don and Chuck that the deal was going to get done.
“They kept telling us, ‘This is going to happen,’” explained Aldrich.
Sure enough, Don and Chuck were approved for a 504 loan. They went to Premarc with an offer and in May 2012, they completed the purchase and the new business was named Cadillac Culvert. The new business specializes in their strength in metal fabrication. They manufacturer underground-corrugated metal products as well as consumer fire pits sold in retail stores and used all across Michigan in the state parks and campgrounds.
The plant is busy once again and the business is doing well. After going through this entire process, Don has some advice for other entrepreneurs, “Don’t give up. It took us 5 months to get this deal done. And make sure you are well-capitalized, because it will take a good investment.”
In addition, Don recommends utilizing the Michigan SBDC, “Without them, we would not have been able to purchase our business. We could have tried to figure this all out on our own, but it would have taken months and time was important. They just had all these resources at their fingertips. I would definitely recommend them.”