Hobbico's employee stock ownership plan purchases distributor
CHAMPAIGN – For the second time in recent months, a major Champaign employer has been sold to an employee stock ownership plan.
This time, it's Hobbico, the model hobby distributor that employs about 700 people in Champaign's Interstate Research Park.
Clint Atkins, who has co-owned the company with Bruce and Jeri Holecek since 1984, said employees were told of the transaction this week.
Last spring, Human Kinetics, a Champaign publishing company that employs more than 300 people, was sold to an employee stock ownership plan in a similar arrangement.
Atkins said the transfer by Human Kinetics founder Rainer Martens helped convince him a similar move would be good for Hobbico.
"I hope it has a positive impact," he said in a Friday interview with The News-Gazette. "The one thing I enjoyed the most is the relationship with a great product, a great facility and a great group of people. It's a lot of fun to walk through the plant, and I hope when employees drive by it, they say, 'That belongs to me,' and have that same pride of ownership."
Hobbico is the world's largest manufacturer, distributor and retailer of model hobby products, specializing in radio-controlled cars, boats and planes.
Atkins and the Holeceks, who live in Florida, will remain on Hobbico's board of directors. Joining them on the board will be longtime Hobbico President Wayne Hemming and Bill Muirheid, the company's senior vice president of finance.
Atkins said things should be "virtually unchanged" for employees – though he hopes they start thinking like owners and considering ways to reduce waste and inefficiency.
"All senior managers now think like owners," he said. "In reality, they really are."
The company traces its origins back to 1971, when Bruce Holecek founded Tower Hobbies in Champaign.
Two years later, Don Anderson founded a separate local company, Great Planes Model Distributors.
Hobbico was formed in January 1986 when Atkins combined the two companies, which he had acquired in 1984. The company became the leading retail mail-order firm selling radio-controlled models at discount prices.
Today Hobbico has facilities in Champaign and Urbana that encompass about 400,000 square feet. In addition to the headquarters in Interstate Research Park, Hobbico has a facility in Champaign's Apollo Industrial Subdivision and a manufacturing facility in Urbana. Functions handled locally include product development, sales, marketing and distribution.
The company also has a 200,000-square-foot distribution center in Reno, Nev., that serves West Coast customers. About 85 employees work at that center.
"This is an absolutely dynamic, great company," Atkins said. "The opportunity to share its future with who made it what it is today is too much to pass up."
Through the years, Hobbico has been approached "by multiple interests that wanted to buy us out," he said.
"It has never had an unprofitable month," he added.
The sale, which was completed Oct. 21, transferred 100 percent of the stock held by Atkins and the Holeceks to a plan held in trust for employees by GreatBanc Trust of Oak Brook.
"Bruce and Jeri and I are very pleased to turn the ownership of Hobbico over to the employees who helped us build the company," Atkins said. "Potentially, 785 employees will become owners of this successful and growing company."
Atkins said the transfer didn't come without some reservations.
"This is like a child, something so precious, something you've protected so long," he said. "It felt like a loss when the actual transaction occurred."
Atkins also operates The Atkins Group, a real estate development company that has developed residential subdivisions, commercial office parks and industrial subdivisions.
A Hobbico press release said more than 11,000 companies in the United States have some element of employee ownership. But only 2,000 of those are 100 percent employee-owned. Well-known employee-owned companies include Starbucks, Lowes, Anheuser-Busch and Southwest Airlines.
An employee stock ownership plan is a type of retirement plan that allows employees to share in the benefits of improved company performance and growth in value. The company makes contributions to the plan on behalf of eligible employees. Newly hired full- and part-time employees are eligible for the plan after a year of employment.