(With updates from Wolf's office and Wolf Org. CEO Danielson) Quad-C, a Charlottesville, Va., investment group, says it has acquired control of the Wolf Organization, the Mount Wolf, York County-based kitchen cabinet design and distribution firm whose past owners, Pennsylvania Gov. Tom Wolf and two cousins, sold most of their shares for $60 million in a 2006 management-led buyout.
Wolf later repurchased some of the shares to recapitalize the company when sales fell in the recession, a fact he used to burnish his job-creator credentials in his successful campaign for governor last year. But Wolf is out now: "Quad-C will hold a majority interest in the company," with bosses (led by CEO Craig Danielson) "owning the balance," according to a statement the company sent me through spokesman David Richwine.
How much did the governor get paid (or write down) in giving up the last of his stake in his family's longtime business? Gov. Wolf doesn't know, says his spokesman Jeff Sheridan: Since candidate Wolf put his investments in a blind trust -- an independently-run portfolio designed to prevent the governor from making public decisions that could enrich him -- "he was not involved in this process and he does not know the details," Sheridan told me.
I wrote about the Wolf organization's shifting fortunes, Wolf's 2009 re-investment, and how he raised $10 million "of his own money" for his campaign (from private investments and M&T Bank loans) while telling voters he put his "every penny" into Wolf Organization, in this story last April. York Daily Record account of the Quad-C deal here.
The new investors will back "new product launches, organic geographic expansion, and acquisitions," Wolf CEO Danielson told me. He said the company's 260 employees are "extremely grateful for the years of commitment, service, and generosity that Tom Wolf and his family gave to the Wolf Organization," and he looks forward to "executing on the company's (and Tom's) vision of making Wolf a nationally recognized brand."
Previous controlling owner of Wolf Organization was Weston Presidio, a Boston- and San Francisco-based private-equity firm that wrote the company's value down to a little more than half of what Wolf was paid for his shares in a management-led buyout before the recession, according to company records from last year.
Officials at Weston Presidio, whose largest investor in the fund that controlled Wolf was the underfunded Pennsylvania state pension fund (SERS) (Wolf says that's a coincidence), didn't respond to calls asking whether they were able to salvage their investment (and the Pennsylvania taxpaying and teacher-pension-receiving public's investment) in the governor's company by selling to Quad-C, or how much they ended up losing.
Quad-C officials haven't had anything to say about what they paid Wolf and his fellow investors, etiher. The company advertises that it typically invests sums of at least $35 million, in target companies that show an "experienced management team; established track-record; sustainable competitive advantages," and/or "attractive growth opportunities,' and are worth at least $75 million.
Wolf Organization was valued at $90 million in the 2006 buyout, but was written down to zero by its investor-owners and lenders before Wolf bought back in three years later, as my story noted. Wolf reorganized and refocused the company; that, plus his reinvestment, enabled Weston Presidio managers to revalue the company, at a level still well below what they paid for it, by the time he left management and ran for governor.
So it's safe to say Wolf's partial re-investment, after saving his company, made it possible for the people who had bought it from him to sell it again later: though it's still unclear whether the private-equity backers who paid him and his cousins in the 2006 LBO, or Pennsylvania's pension fund which helped finance the buyout, ended up making or losing money. Or whether Wolf made back his 2009 reinvestment. Or how well M&T Bank got paid for its investment in the future governor.