Diligence Pays Off: He Now Owns Company
Jorge Ramirez, 35, grew up in Los Angeles and went to work for a small, family-owned manufacturer in 1988 while he was getting his electrical engineering degree. He stayed with the firm after getting his MBA and last year bought the company. Ramirez learned that going from employee to owner takes a professional team, good networking skills and lots of time. He was interviewed by freelance writer Karen E. Klein.
In 1988, when I started working here, I was going to Cal State L.A. and figured I would end up working at a large engineering firm. The former owner valued my work ethic and became my mentor. My father owned his own business and I realized that that was something I had always dreamed of myself.
By 1993, the owner wanted to find an exit strategy. He semiretired and made me director of operations on a trial basis while I looked into employee stock option plans and other exit strategies for him. None of them seemed to meet his needs and in 1997 I decided to buy the company myself.
We decided on some initial terms that gave me six months to finalize the deal, but found out that was not enough time. We extended the terms twice because it took a good 18 months to get all the pieces in place.
Before anything else, I took a look at the company’s key players. I made sure that we had the best sales and engineering groups in place. The professionals we worked with, our CPA and business attorney, were also important and I wound up getting a new lawyer with more experience.
This same group of people was scrutinized closely by the investors and the bankers. They looked at our financials, which were strong, but they spent the rest of their time analyzing the team of people who were running the company, and getting reassurance that they were loyal enough to stay on board.
Initially, I told only two key employees about my plan to purchase the firm. It was a big transaction and there were so many variables, I honestly did not know how it would work out. So I didn’t want people to start worrying about job security.
Purchasing a company is not an experience that a lot of former employees have gone through, so it was hard to get advice from my peers. I had to raise about $1.2 million from investors and $1.2 million from a bank. I approached it almost like I would a marketing project. I needed to define my product, find my target market and try to match them up.
Networking was the key to finding a group of investors. I talked to one contact after another. Finally, a group came together that was attracted to this company because they saw a successful, high-tech manufacturer that was going to become minority-owned and they wanted to support that. I also got funding and valuable contacts in the banking industry from a nonprofit organization called NEW Capital that invests in minority-owned companies.
Once the private funding was lined up, we put together a package on the company and took it to several banks. They spent three months looking at our books and reviewing our tax returns. More than one bank offered to finance the purchase, so we were able to choose the best deal.
Last fall we were named one of America’s 25 Most Successful Smaller Manufacturers by Industry Week magazine. Our revenues have grown by 50% over the last three years while profits have increased by 8%. My goal is to double revenues by the year 2000.
If your business can provide a lesson to other entrepreneurs, contact Karen E. Klein at the Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia 91016 or send e-mail to kklein6349@aol.com. Include your name, address and telephone number.
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At a Glance
Company: Integrated Circuit Development Corp
Owner: Jorge Ramirez
Nature of Business: Manufactures equipment for semiconductor industry
Location: 3731 Park Place, Montrose 91020
Web site: https://www.heateflex.com
E-mail address: jramirez@heateflex.com
Year founded: 1974
Employees: 24
Annual Revenue: $3.7million
