By Vicki Hillhouse, September 23, 2013, Walla Walla Union Bulletin
Martin Archery could have a shot at survival under a new owner.
A Los Angeles-based private equity firm would continue the manufacturing operation in an elaborate change of hands that includes help from the Port of Walla Walla.
Diversis Capital LLC Managing Director Ron Nayot said Friday it’s too soon to disclose terms of the firm’s proposal. However, the vision includes a long future for the more than 60-year-old company founded by the late Gail Martin and his wife, Eva.
“It’s still early right now, and there’s a lot more work to be done, but we’re trying to work quickly to keep Martin Archery a surviving business,” Nayot said.
The next step in the process comes Monday at a special meeting of the Port of Walla Walla. Port commissioners will consider purchasing the more than 41/2-acre complex on which the company operates off Heritage Road.
Port Executive Director Jim Kuntz said the economic development agency would pay $1.3 million for the property, then lease the property to the new business.
Kuntz emphasized the 4 p.m. meeting Monday at the Port office, 310 A St., is designed simply to seek approval of the proposal. He said it could take weeks to finalize negotiations, formalize paperwork and set the changeover in motion.
The Port’s land buy, at about $400,000 less than the original listing price, would help pay down the tremendous debt that has led the company to the brink of closure.
“The Port Commission has a real emphasis on business retention,” Kuntz said. “This has been a stalwart company for decades. (The Port) just feels to the point that we can save some jobs and grow the business it’s an investment worth making.”
He said the proposed lease would start with a 10-year timeline. “That’s one of the big things for the Port,” Kuntz said. “We want the company to stay in Walla Walla.”
Diversis would likely form a new limited liability company under which it would continue manufacturing the bows that have been used by bowhunters and archers worldwide, and even in the spotlight of Hollywood films and through celebrity endorsements.
The three-generation business that produced at least 50,000 bows a year and at its height employed 100 people had been languishing amid debt. But few knew how serious it was until the July 21 death of founder Gail Martin at 89.
The man who had turned a hobby fletching business into a manufacturer with global reach was so highly regarded as a pioneer and Archery Hall-of-Famer that those in the industry to whom he owed money were inclined to cut the business more slack, Chief Executive Officer Tim Larkin said last month.
Although the business has returned to profitability, recapitalization is essential for the company’s survival, he said. Employment is down to about 20 people at the plant.
Diversis investors believe through streamlining measures and re-energizing sales, the company can grow far beyond that.
“Long-term the goal is to make the business much larger in the community and bring more jobs to Walla Walla,” Nayot said.
Started about four months ago, Diversis primarily focuses on small to middle-market investments of up to $20 million in equity, according to its website. The company targets underperforming businesses for rebuilding.
Nayot commended the Port and Martin family for what is a “challenging transaction,” especially considering how close the business is to closure.
“It’s been a great effort to rally together and save this thing,” he said.
“At the point that we’re at it’s definitely got the opportunity to thrive. A couple months later, it could have been in real peril.”