Horizon Hobby to be sold to investment group
December 9, 2013
This article was updated Dec. 18.
Horizon Hobby will be sold to an investment group led by Horizon CEO Joe Ambrose.
Horizon Hobby Inc., formerly an employee-owned company, will be purchased by an investment group led by Horizon President and CEO Joe Ambrose, according to a press release on the company’s website.
Horizon’s board of directors agreed to a sale of the company that is expected to close in early January. The Champaign, Ill., based hobby company announced the sale to store owners Dec. 9 via email and on its website.
“You can expect this change to be seamless to you,” Ambrose wrote to store owners and Horizon customers in the email.
Horizon’s management team will remain in place, and the company has no planned layoffs because of the transaction, according to the email.
Prior to the sale, Horizon Hobby had been an employee-owned company for seven years. Before the employee stock ownership plan (ESOP) was established, the company was family owned and run by founder and CEO Rick Stephens.
“The company you have come to know and rely on is not changing,” the email read.
Qualified U.S. Horizon employees will receive the cash value of their shares in the company, Ambrose said. The decision to accept the investment group’s offer was made by the trustee of the Horizon Hobby ESOP and the independent directors of the Horizon Hobby board, acting in the best interest of the employees, he said.
“The board approved the sale because they viewed the transaction as very positive to the beneficiaries of the ESOP trust ... and beneficial for Horizon to enable a strong future,” Ambrose said. “We believe that we’re better positioned for long-term growth with this new financial structure than with the structure of an ESOP. Our product development philosophy depends upon deep investments in designing game-changing R/C technologies such as SAFE and AVC for example.”
The investment group that purchased Horizon previously consisted of two other companies: Armory Capital LLC, a family-owned company also based in Champaign, and Mill City Capital L.P., a private equity firm located in Minneapolis. Armory Capital was founded by Jacob Ambrose, who is Joe Ambrose’s son, Rusty Freeland and Greg Lykins, in association with the August C. Meyer Jr. family.
“Both Armory Capital and Mill City Capital are long-term investors who are uniquely aligned with Horizon’s culture, core values and strategy,” the email read.
This sentiment was shared by Stephens, Horizon’s founder. “My brother Larry and I are pleased that our new investors agree with our approach, and we believe this transaction presents a tremendous opportunity for our employees.”
The sale is subject to customary regulatory approval, the release said. Financial terms of the sale were not released.
Further questions about the sale should be directed to a Horizon sales rep or the sales management team, the release said.