Saving Bresser A Lesson in Long-Range Vision

How Helmut Ebbert powered through a now-or-never moment to raise millions and hammer out a partnership to save German microscope maker Bresser back in 2008.
Better with Bresser.

During the 2008 holiday season, Helmut Ebbert lost his voice. But it wasn't from singing too many Christmas carols. It was from spending so much time on the phone with business associates around the world.

The chief executive of  Bresser, the Münsterland-based maker of fine telescopes, binoculars and microscopes, was desperately trying to prevent the company from being sold to investors in the United States. He had just two days to present a $12.3- million counteroffer. He hoped to save 50 jobs and keep part of the business in the family that founded it half a century earlier.

That was eight years ago. And only now can Mr. Ebbert say the decision was the right one in terms of revenues, jobs and new foreign subsidiaries. Looking back on Christmas 2008, what happened at company headquarters in Rhede, North Rhine-Westphalia is a lesson in trust, courage and entrepreneurial spirit.

The family company was founded in 1957 by Josef Bresser, set up to import expensive lenses for binoculars from Asia. When the founder died suddenly in 1979, his 36-year-old son Rolf replaced him at the helm. He expanded the business and it flourished.

But by the 1990s, international competitors were bringing more advanced computer-guided telescopes to market. Bresser didn’t have a similar product to offer and lacked capital for marketing and investments.

So in 1999, Rolf Bresser sold his company for $7 million to publicly listed Meade Instruments in Irvine, California, one of the world’s leading manufacturers of telescopes.

Other firms offered more money, but Rolf Bresser decided in favor of his longstanding commercial partner. He stayed on for three years as an employee. Then, before leaving, he brought in a new chief executive – Helmut Ebbert.

Everything was going well, it seemed. But in 2008, Meade hit hard times and put Bresser up for sale.

“Things happened fast,” Mr. Ebbert says. “When we got the news, a U.S. investor had already put in a bid for the company.”

Employees were worried about a hostile takeover and layoffs. A week before Christmas that year, Mr. Ebbert decided to fight back – together with the former company owner.

Time was short. Meade Instruments wanted to book the sale before the balance-sheet date of December 31, which meant there were just weeks to find partners and financing. What's more, the American company insisted in being paid $12.3 million in cash.

But Mr. Ebbert had a plan: As chief executive, he would take 20 percent of the future shares, while former owner Mr. Bresser would take 40 percent.

A third strategic investor would have to contribute the remaining 40 percent of the sales price. But where?

In the middle of the night, Mr. Ebbert called his main supplier of many years. “Will you come aboard?” he asked He Jian, founder of Jinghua Optical Electronics in Guangzhou, China.

After reflecting for 30 minutes, Mr. He agreed. On December 19, Mr. Ebbert submitted the German-Chinese counteroffer.

Meade insisted on a financing commitment by the following Monday.

Throughout the weekend, Mr. Ebbert calculated and discarded various credit structures. Which bank would issue the necessary loans quickly and flexibly? Only local banks came to mind, but even they don’t like being put under time pressure by customers.

The central Western region of Münsterland, however, is a friendly place, where people know each other and are willing to help out. Mr. Ebbert and Mr. Bresser managed to bring the heads of two local cooperative banks to the table at 10 a.m. on Monday, December 22.

Just an hour earlier, Mr. Ebbert had met with worried and angry employees, but could not tell them yet about his “Plan B” to buy back the company.

When the four bank managers arrived, Mr. Ebbert described the urgency. He outlined the promising future of the company, provided current figures, analyzed growth projections, rebutted reservations and pleaded in favor of his committed team of workers.

That afternoon, the bankers granted the financing to Mr. Ebbert and Mr. Bresser – and Mr. Ebbert mortgaged his home.

By 5 p.m. on the same day, the commitments of all three partners and bank financing details were faxed to Meade Instruments in California. At 9 p.m., their bid was accepted.

The next day on December 23, the last working day before the holidays, Mr. Ebbert planned to offer his employees an early Christmas present.

But he and his team rejoiced too early.

At 3 p.m. that Tuesday, Meade managers called with news that the U.S. investor had submitted a new offer, and trumped the German-Chinese partnership. They did not disclose the exact sum.

But Mr. Ebbert and Mr. Bresser had no intention of giving up. They couldn’t come up with more money. Instead they presented the possibility of buying Meade’s U.S. subsidiary as well – which the competing U.S. investor refused to do.

When it was time for Christmas Mass, the duo were once again telephoning, calculating and discarding.

On Friday, December 26, Mr. Ebbert sent in the new offer. Meade put a lawyer on a plane to handle contract negotiations. Now it was a matter of details. A hastily appointed lawyer represented Mr. Ebbert, Mr. Bresser and Mr. He.

But in the early days of January 2009, the notary said he could not sign off on pledging the partners’ share to the banks as collateral because there was not a neutral Chinese translator for shareholder Mr. He.

But where would they find a Chinese translator in a rural place like Münsterland?

“I went immediately to the local Chinese restaurant,” Mr. Ebbert says. “The owner was repainting the walls.”

The man agreed to join him at the notary's office in Düsseldorf, where the sales agreement with Meade was signed as planned.

But once again, Mr. Ebbert and Mr. Bresser broke out the champagne too early. Meade was demanding a lightning-quick transfer of the $12.3 million — within two hours.

Mr. Ebbert attempted to do this, but one last glitch occurred. Meade had given them an incorrect account number. But 24 hours later, the $12.3 million was located in the intercontinental banking system — and the purchase was finally complete.

Today, Bresser has €31 million in sales, 25 percent more than in 2008, with 75 instead of 50 employees. Rolf Bresser rescued his life’s work and left for a second time, having sold his share to Mr. He.

Mr. Ebbert, for his part, went on to found new firms in France and Spain, along with purchasing an an online retailer, a Dutch outfitter of photo studies and a British telescope specialist. Bresser has also made a partnership with respected U.S. scientific organization National Geographic.

Mr. Ebbert is both proud and thankful that things went his way. “I lit a candle in gratitude that everything turned out well,” he says.

 

This article originally appeared in economic weekly WirtschaftsWoche. To reach the author: [email protected]