Minuteman International Inc.

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Minuteman International Inc.

Ill South Rohlwing Road
Addison, Illinois 60101
U.S.A.
Telephone: (630) 627-6900
Fax: (630) 627-1130
Web site: http://www.minutemanintl.com

Public Company
Incorporated: 1951 as American Cleaning Equipment Corp.
Employees: 414
Sales: $85.2 million (2000)
Stock Exchanges: NASDAQ
Ticker Symbol: MMAN
NAIC: 333319, 551112

Based in Addison, Illinois, Minuteman International Inc. develops and manufactures equipment and products used for floor maintenance, including walk-behind and rider-operated floor scrubbers; burnishers and floor machines; indoor/outdoor sweepers; carpet care machines; and critical care vacuums for removing hazardous waste. The company serves both commercial and industrial clients in more than 40 countries through an established network of distributors.

Laying the Foundation: 1951–80

Minuteman’s roots go back to July 1951 when the company was incorporated under the name American Cleaning Equipment Corp. Its founders, Jim McSheehy and Mat Zmudka, decided to focus the organization’s efforts on industrial customers, because commercial clients already were being served by much larger competitors. In keeping with this strategy, American Cleaning became a pioneer by unveiling the very first vacuum attached to a 55-gallon drum in 1952. Additionally, it also was one of the first manufacturers to produce critical filter vacuums for hazardous waste removal. Over time, this niche proved to be valuable for American Cleaning. In 1981, it controlled about half of the market for such devices, which larger manufacturers often overlooked because they were highly specialized. American Cleaning mostly served clients in the mid-western United States. Its product line essentially included machines for cleaning walls and polishing floors, wet/dry vacuums for commercial and contractor use, and wet/dry vacuums used for boiler and industrial cleaning.

After Jim McSheehy passed away and Mat Zmudka decided to sell American Cleaning, a consultant from Cleveland named Bob O’Brien bought half of the company and became its president in 1974. Prior to that time, O’Brien, who held an engineering degree from Purdue University, had worked for several leading enterprises, including automotive giant Chrysler and consulting firm Booz, Allen & Hamilton. By the late 1970s, O’Brien and the McSheehy family, which maintained part ownership, were interested in selling American Cleaning because of factors like rising interest rates and an unfavorable climate for expansion.

Changing Hands in the 1970s

It wasn’t long before Hako Werke, a West German company that manufactured complementary products, expressed an interest in acquiring American Cleaning. In 1978, Hako Werke President Tyll Necker approached O’Brien in Atlanta at the International Sanitary Supply Association trade show. A period of discussions and negotiations followed, and in June of 1980 Hako Werke acquired American Cleaning. The new company was renamed Hako Minuteman Inc. Hako Werke had the resources to take Minuteman to a new level and made sure proper attention was given to supporting, marketing, and growing the enterprise.

In 1981, Jerome E. Rau was named president and chief executive officer of Hako Minuteman Inc. Until his death on September 20, 2000, Rau successfully led the company through an era of growth, development, and expansion. During his tenure, the firm’s sales grew from $4.5 million to more than $85 million.

Rau was born in Cincinnati, Ohio, on December 11, 1932 to Arthur and Kathryn Rau. In 1944, he moved to Prior Lake, Minnesota, and attended Shakopee High School, graduating in 1951. Rau graduated from the University of Minnesota, where he played football. Rau then joined the Reserve Officers Training Corps (ROTC) and spent two years at Fort Sill, Oklahoma. Prior to entering the business world, he taught at the junior high school level for eight years, and at the same time coached high school football and refereed basketball games. His business career began with Spring Park, Minnesota-based Advance Machine Co. in 1967, where he worked in sales and eventually was named vice-president of the company’s industrial division.

In November 1984, Minuteman made its first acquisition when it purchased the Minnesota-based Multi-Clean Products Division of H.B. Fuller Co. The acquisition was very positive and allowed Minuteman to expand its distribution network and add an already established line of carpet cleaning equipment to its offerings, along with chemical coating and cleaning products. Prior to the acquisition, Multi-Clean had been in operation since 1934, and had been producing chemicals since 1946.

By 1987, Minuteman was serving a broad range of industrial, institutional, and commercial end-users—including supermarkets, hotels, factories, churches, retail stores, offices, schools, convalescent centers, hospitals, and nursing homes. Its product line included floor and carpet care equipment, and commercial and industrial vacuums manufactured in Addison, Illinois. Additionally, the company’s products for chemical cleaning and coating were produced in St. Paul, Minnesota. In March of 1987, Minuteman became a public corporation, and its shares were traded on the NASDAQ.

The following year, Minuteman completed a 46,000-square-foot addition to its plant in Addison, Illinois, which gave the company approximately twice the factory and warehouse space it had previously. In Minuteman’s 1988 annual report, Rau announced that the company would move its engineering and development departments into the new space and that Minuteman would invest in new equipment for them the following year so the company could stay on the cutting edge from a technology standpoint.

Growth and Expansion in the 1990s

Following the expansion of its Addison, Illinois, plant, Minuteman obtained 40,000-square-feet of new space for its Minnesota-based Multi-Clean division and moved it from St. Paul to Shoreview. The new facility would allow Multi-Clean to increase production, and improve the safety and efficiency of its operations.

In 1991, Minuteman made its second major acquisition and purchased Parker Sweeper Co., a manufacturer of equipment used for sweeping lawns and turf. By doing so, it assimilated more than 100 years of history into the organization. The story of Parker Sweeper reveals a rich and interesting heritage. In 1878, a pattern maker named William Henry Thomas Parker left England for America. He moved to Springfield, Ohio, which at the time was a hub for agricultural equipment manufacturing, and established a pattern-making shop there in 1884 called the W.T. Parker Manufacturing Co. His son, Edwin D. Parker, joined him in 1915 and the business was renamed Parker Pattern Works Co. It was the younger Parker’s idea to create a lawn-sweeping device that resulted in the birth of the lawn sweeping industry. Prior to the invention of lawn sweepers, grass clippings and other debris were removed manually with hand rakes. Sweeping devices made the task of removing debris easier and more efficient.

A Chicago firm by the name of Hibbard, Spencer, and Bartlett was the first recorded customer to purchase a sweeper in 1921. After that initial sale, Parker began developing and producing lawn sweepers on a larger scale. In the late 1920s and 1930s it marketed two models, the “Everwear” and the “Springfield,” to parks, cemeteries, and other customers with large lawns. When the lawn sweeping business boomed, Parker split into two separate companies. Pattern making continued under the already established company name, while the Springfield Lawnsweeper Co. concentrated on making lawn sweepers. The advent of World War II temporarily changed the operations of both companies. They were joined back together to form the Parker Pattern and Foundry Co., which manufactured military parts.

In 1944, Edwin Parker’s son, Richard, was named the company’s general manager. He previously had worked for an engineering firm in Indianapolis, but opted to join the family business because his father was going to divest it. After the war, the company returned its focus to lawn sweepers and introduced machines suitable for domestic lawn care use. In 1948, the company changed its name to the Parker Sweeper Co. Richard Parker became company president in 1959.

During his affiliation with Parker, the company experienced a period of growth and expansion. Parker eventually acquired the Lawn Beauty Spreader Division of Schneider Metal Manufacturing Co. On the international front, its products reaching South American, European, African, and Far Eastern markets by the mid-1950s. By the late 1960s, Parker’s product line included indoor and outdoor vacuums, mass-debris removal equipment, power rakes, lawn spreaders, and powered and trailing lawn sweepers. By the late 1970s, international sales accounted for 20 percent of the 120-employee firm’s sales, and its reach had grown to include the Soviet Union and Japan. Parker became a supplier to Sears Roebuck & Co. in 1977, and received the Sears Symbol of Excellence Award three years later. The company celebrated 100 years of operation in 1984. At that time, it controlled 85 percent of the U.S. lawn sweeper market, and four smaller firms controlled the remainder. Richard Parker died in 1989 at the age of 80, three years before his company was acquired by Hako Minuteman.

Company Perspectives:

The core of Minuteman International is anchored by a single, straightforward vision—to deliver exceptional floor cleaning equipment and chemicals combined with a single-minded focus to anticipate and answer our customers’ needs. Answering those needs is just the beginning of a performance-driven philosophy to help our distributors maximize profit and provide outstanding service, products, and training to each Minuteman customer. That philosophy is combined with the ongoing development of new and more cost effective methods of manufacturing and product design to keep our customers on the leading edge of floor care technology into the next century.

In 1994, Minuteman moved Parker’s operations to its Hampshire, Illinois, facility, where a new 200,000-square-foot foundation had been created to accommodate expansion. It could be expanded in 50,000-square-foot increments, the first of which was finished in the third quarter of 1994. Also in 1994, Minuteman changed its official name from Hako Minuteman to Minuteman International. An aggressive international expansion followed, and Minuteman began marketing its products in Belgium, Central America, Iceland, Sweden, the United Kingdom, and the Philippines. In the company’s 1994 annual report, CEO Jerome Rau indicated that during 1995 Minuteman would attempt to increase its reach in Europe, as well as in Asia, Canada, Latin America, the Middle East, and the Pacific Rim.

In 1995, the growth and expansion that had started earlier in the decade was unfolding with considerable momentum. Exciting developments were happening on several fronts. First, Minuteman increased the size of its engineering staff by 25 percent in response to demand and the time required to roll out new products. The company’s international presence grew when it introduced products in five new markets, bringing the number of countries it served outside of the United States to 40.

In September 1995, the second 50,000-square-foot module of the company’s Hampshire, Illinois, plant became operational. This happened ahead of schedule and would lower handling costs and increase efficiency in the area of manufacturing. Along with its expanded infrastructure, Minuteman installed a new laser system, which it used to cut sheet metal more precisely, as well as a unit that washed parts more effectively before they were painted.

In 1995, Minuteman President and CEO Jerry Rau was selected as vice-president/president-elect of the International Sanitary Supply Association (ISSA). According to Minuteman’s 1995 Annual Report, Rau was the first equipment manufacturer to head up the trade organization since 1959. At that time, only five equipment manufacturers had served on the association’s board since the end of World War II. According to the report, Rau had several goals for ISSA. They included “marketing, building, and enhancing the ISSA for greater exposure to new markets, developing active ISSA representation for chemical and equipment manufacturers faced with continuous regulations, and developing new educational opportunities which offer members new ways to enter and take advantage of new markets and products.”

In 1996, Minuteman celebrated its tenth anniversary of being a public company. That year, the company experienced even greater international expansion. A sales manager was hired to coordinate sales activity in Europe, and a warehouse was secured in the Netherlands so products could be delivered more quickly. The appearance of Minuteman’s products also changed when a new charcoal and rich wine color scheme was introduced. The move was intended to provide a more modern look than the orange colors it used previously.

In 1997, Minuteman’s sales exceeded $50 million for the first time in the company’s history, reaching $53 million. That year, Multi-Clean was made a separate company division. In Minuteman’s 1997 annual report, Rau called this “a challenge and a source of satisfaction.” To make the unit more specialized, the company had to hire and train a sales force dedicated to cleaning chemicals and coating products. The new sales force was separate from the sales force that sold Minuteman’s equipment.

Nearing the decade’s end, Minuteman made its third major acquisition when it purchased Aberdeen, North Carolina-based AAR PowerBoss Inc. in 1998. The addition allowed Minuteman to bolster its already strong lineup of products with large, industrial, rider-operated scrubbers and sweepers, which were different from the mostly walk-behind, commercial units Minuteman had been producing. According to Crain’s Chicago Business, “The merger gave Minuteman, which sold its products mostly to big retail chains, its first real entree into the industrial market and a broader lineup of products to compete against market leader Tennant Co. of Minneapolis.” In addition to expanding its product offerings, Minuteman also was able to improve efficiency by moving the production of some products, such as its 3800 rider scrubber, to the PowerBoss plant. The successful integration of PowerBoss into Minuteman allowed sales to reach an all-time high of $76 million in 1999, ending the decade on a high note.

Into The Millennium

In January 2000, Jerome Rau’s son, Gregory J. Rau, was named Minuteman’s president and chief operating officer. The elder Rau maintained his status as chairman and CEO. Prior to the promotion, Gregory Rau served Minuteman for 16 years in a variety of sales positions before becoming vice-president of sales and later executive vice-president. An established succession plan was for the younger Rau to become CEO in January 2001. However, Jerome Rau’s unexpected death during a business trip to Buenos Aires caused Gregory Rau to assume the role sooner. Jerome Rau died from a heart attack at the age of 67 on Wednesday, September 20, 2000.

Key Dates:

1951:: Company incorporated in July under the name American Cleaning Equipment Corp.
1952:: American Cleaning unveils a vacuum attached to a 55-gallon drum, which was the first of its kind.
1974:: Bob O’Brien buys half of the company and is named president.
1980:: Hako Werke acquires American Cleaning in June, and the company is renamed Hako Minuteman Inc.
1981:: Jerome E. Rau named president and CEO.
1984:: Minuteman Canada is established; company makes its first acquisition, of the Multi-Clean Products Division of H.B. Fuller Co.
1987:: Minuteman goes public on the NASDAQ.
1991:: Company makes its second major acquisition by purchasing Parker Sweeper Co.
1994:: The company name is changed to Minuteman International Inc.
1997:: Minuteman’s sales exceed $50 million for the first time in company history, reaching $53 million.
2000:: Jerome Rau dies from a heart attack at the age of 67; Gregory Rau named president and CEO.

According to the September 24, 2000 Chicago Tribune, Gregory Rau said his father “was known most for his willingness to counsel and offer guidance to his numerous employees and friends.” The company’s 2000 annual report summarized the extent of their loss. It read: “When Jerry Rau delivered a message, people heard it. It was hard to ignore his passion for details and getting things right, every time. Because to Jerry Rau, every detail mattered—especially those details that stood for quality, integrity, and performance. Jerry Rau’s dynamic management style brought the company’s product line to an industry breadth and depth challenged by few. In addition, Rau ushered in an era of innovative engineering and cutting edge technology which led to over 33 patents for the company and ‘first time ever’ products such as the Ultra Violet Single Floor Coat System. Rau’s intuitive vision continued to drive the company into new markets such as industrial cleaning, outdoor cleaning, and lawn cleaning.”

Although the elder Rau’s death was a dark shadow on the year 2000 for Minuteman, the company’s sales reached a record high of $85 million. Additionally, Forbes ranked Minuteman among America’s 200 best small companies. Furthermore, Crain’s Chicago Business called Minuteman “an acquirer in a consolidating business,” and indicated that Gregory Rau was expected to carry on this strategy, painting a bright picture for the firm’s future.