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CLINTON, MASS. -- Gordon Lankton still arrives at Nypro Inc. every day at 5 or 6 a.m., and does a fast-walk workout around the room that houses his cubicle.
He usually leaves before lunch and makes a short walk to his Museum of Russian Icons in Clinton, Mass. Then he usually comes back to Nypro and stays until 4 p.m. or so.
Lankton, 81, bought into Nypro in 1962 and helped build it into a powerhouse global custom injection molder and contract manufacturer, with $1.2 billion in sales.
Now that Jabil Circuit Inc., a $17 billion contractor, is buying Nypro, Lankton hopes he can keep his daily routine. "I'm not really spending too much time on Nypro now. It's just a nice little place to do my work quietly in the morning," he said.
Lankton is chairman of the board at Nypro — for now. The sale, with Jabil set to pay $665 million for Nypro, is expected to close by May, the end of Jabil's fiscal third quarter.
"They haven't gotten into that with me to a great deal, but I think we will not have a board of directors at Nypro, which I'm chairman of. That's the only official title I have at Nypro is chairman of the board," he said.
In a Feb. 21 telephone interview from Clinton, Lankton talked about the coming sale. He outlined how Nypro was hurt by reductions in some key consumer electronics products — Nokia cellphones and the BlackBerry — and how the ESOP structure can limit the ability to raise capital to grow in tough global markets.
Lankton was in Russia on Feb. 4, the day the sale was announced. The board held a conference call meeting Feb. 3, a Sunday, to approve the deal, which had been in the works for several months. They emailed some documents for Lankton's signature.
Lankton was in Moscow for a regularly scheduled board meeting at a custom molding plant jointly owned by him and Nypro. He got there a few days early to do some Russian icon work, his hobby and passion.
Nypro is one of the world's largest custom injection molders, running plants in 10 countries. Jabil will be buying Nypro from its employees, a group of about 2,100 people — about 1,900 in an Employee Stock Ownership Plan and another 200 key international employees outside of the ESOP. (Nypro employs a total of around 12,000.)
Lankton said he now owns only about 1 percent of the company, after years of rewarding high-performing employees with shares, and setting up the ESOP in 1998.
Ted Lapres, Nypro's president and CEO, and Jabil officials have said the ESOP impeded the ability to secure major financing, to meet consolidating global competition. That will change under the ownership of the St. Petersburg, Fla.-based Jabil, which trades on the New York Stock Exchange.
Although Lankton stresses that "I'm not a financial guy and I don't pretend to be," he agrees with that point of view. "The money that we give to the employees [in the ESOP], is detracting from the amount of capital," he said.
Lankton said he did not recognize that issue when setting up the ESOP 15 years ago.
He called Jabil "an ideal partner for Nypro" that will help the plastics processor keep growing.
Jabil is buying 100 percent of Nypro, including Nypro's ownership portion of joint ventures NyproMold Inc. and NyproTool Manufacturing Group. Jabil officials will be talking to the joint venture partners. NyproMold is a 50-50 joint venture between Nypro and Bill Muldoon.
To prepare for the interview with Plastics News, Lankton wrote a statement talking about changes in Nypro's electronics business, and how the talks with Jabil started: "Nokia and BlackBerry have been our two largest customers over the past five years, with about 35 percent of our business. Both of these customers have had serious reductions in the marketplace recently. It's not been easy for Nypro to make up for this kind of reduction in a short period of time, but we have had growth in our packaging and health-care businesses.
"In the midst of all this, our CEO, Ted Lapres, met up with Jabil's CEO at some conferences. They started talking about some mutual business interests and all of this resulted in a visit to Nypro headquarters in Clinton."
Nokia Oyj, once the world's largest maker of cellphones, has been slow to bring smartphones to market. BlackBerry, formerly known as Research in Motion Ltd., lost its big lead in smartphones to competitors like Apple Inc's iPhone and phones using the Android operating system. Lankton said Nypro had all of Nokia's business for many years and had most of BlackBerry's business.
Lankton said Nypro officials were not actively looking for a sale. Jabil made a big move into plastic molding in 2006 by buying Taiwan Green Point Enterprises Co. Ltd., an Asian molder of cellphone handsets and other electronic devices. But in general, Jabil has not made a lot of acquisitions.
In a conference call to analysts, Jabil Chairman and CEO Timothy Main said health care and packaging were the most important part of the deal. Main also praised Nypro's mold-making expertise.
In a 1999 Plastics News article about the then-new ESOP, Lankton said: "I'm not a strong advocate of contract manufacturers being public companies, because it destroys them."
The story when on to say that Lankton "believes employees and managers of public companies tend to focus on the stock price, which does not mesh well with the dynamic, fast-moving contract manufacturing business that is filled with ups and downs."
When asked about those past comments, what does Lankton say today? "That's what I probably said then. I don't know whether I'd say that now or not," he said.