Case Studies

Mel-Ba Manufacturing, Inc.

Mel-Ba Manufacturing, Inc. is a screw machine manufacturing company located in Elyria, Ohio, originally incorporated in 1956. Its products include CNC milling, drilling, turning, centerless grinding, Plug Nuts and armature shafts used in motors.

After experiencing a loss of customers and declining sales, company owners planned to sell the business in 1996. When they learned of Mel-Ba’s plans to sell, Donald Bruce Ramsey and Don Scott, both employees of a Mel-Ba customer, decided that they wanted to buy the floundering company. Ramsey and Scott were convinced that they could increase sales, regain lost customers and attract new customers.

The two approached the Lorain County branch of Bank One for a loan. The bank, in turn, contacted Growth Capital to share in the financing risk. With the company name intact, the two men closed the deal to acquire the equipment assets of Mel-Ba Manufacturing. The newly acquired company leased the existing 20,000 square foot space for five years with an option to purchase the building. In 1999 Ramsey became the sole owner of Mel-Ba Manufacturing when Don Scott retired and sold his interest to Ramsey.

Since the purchase in 1996, the number of Mel-Ba Manufacturing employees has increased from 17 to 28. Total sales and customer base has also grown significantly. By end-of-year 2000, Ramsey estimates that Mel-Ba will reach an overall sales growth of 66% since 1995.

With its building lease set to expire and a need for additional manufacturing space, Ramsey contacted Buckeye Community Bank and Growth Capital in September 2000 to assist with his next step: to purchase the existing building and build an addition for office space at a cost of $1,256,000.

The project would provide space for quality control equipment currently located in a trailer on the manufacturing floor. It would also enable the company to re-position equipment into a more efficient layout, resulting in increased productivity and competitiveness. Once again, Ramsey’s request was approved. With an October groundbreaking, Mel-Ba plans to complete its expansion in spring 2001.

During the next three years the company plans to increase its workforce to 40 employees. By 2003, Ramsey expects sales to increase by 100% over 1995 levels.

“Without the assistance of Growth Capital, the purchase of the business and real estate at the interest rates we currently enjoy would not have been possible,” says Ramsey. “Growth Capital and SBA have given me the opportunity to pursue my dream of growing a successful company.”

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