Now that Onex Corp. has agreed to buy Husky Injection Molding Systems Ltd. for US$957.6 million, I'm wondering what sort of owner Onex will be. After all, Husky isn't a typical manufacturing company. And that's largely because founder and Chairman Robert Schad has never been a typical company CEO. Schad is the kind of boss who speaks out against global warming, donates big bucks to environmental causes, and has an employee cafeteria that features healthy food -- don't look for donuts and french fries in Husky's Bolton, Ontario, headquarters! But will Onex, a private equity firm, keep Husky's unique company culture? At least one financial expert in Canada thinks changes at Husky are likely. Andrew Willis, author of the Streetwise Blog at the Toronto Globe and Mail, calls Onex an "contrarian" investor, and writes today:
Watch for another textbook case of the Onex approach to building a company. Rival private equity funds fell away because they couldn't see how to make a Husky buyout work with a relatively expensive Canadian work force. Onex's single greatest talent in past deals has been winning concessions from employees in return for equity – a process that changes corporate cultures for the better and usually produces paydays for the staff. Full marks to Husky founder Robert Schad for what he's created, and here's hoping the $384-million he is about to receive goes to great environmental causes. Now look for Husky to quietly acquire other manufacturers as it expands globally, lower its costs, and reappear on public markets in few years time as a far stronger and more valuable entity.How's that for a prediction? Can Onex really lower costs at Husky by trading employee concessions for an ownership stake? And what machinery companies might be a good fit to combine with Husky, if Onex is really in a mood to build on this acquisition?