Aetna Machine Company

Aetna Machine Company, Inc., a provider of precision computer numerical control (CNC) machining services is located in Cochranton Borough, a rural community of approximately 1,100 situated in southeastern Crawford County. The shop manufactures and assembles components for other manufacturers servicing the transportation, heavy equipment construction, energy well drilling, and space exploration industries. The business was founded in 1955, and has a tradition of delivering superb quality coupled with a strong commitment to excellent customer service.

By 2010, the ownership of the corporation was held by an out-of-state owner that was not active in the business and decided to sell it. Aetna operated as a small shop with six employees, so the likelihood of a purchaser consolidating the business with a larger manufacturing facility.

The key business managers, Mary Beth Hummel, Richard Motzing, and Daniel Steinbeck approached the owner with a buy out offer, inclusive of all the real estate and manufacturing equipment. Their areas of business expertise included finance, engineering, operations, sales, human relations, and purchasing. In March 2011, Mary Beth contacted the Gannon University Small Business Development Center (SBDC) requesting assistance with the preparation of a financial proposal and with the development of a loan package to finance the business purchase.

The Gannon SBDC initially helped the Aetna management team perform a feasibility analysis to confirm the financial viability of the business purchase. Next, a thorough analysis needed to be conducted of the business' recent financial performance. The Gannon University SBDC also provided counseling concerning the structure of the Purchase Agreement. Over the next few weeks, the clients worked with the Gannon University SBDC, developing a financial proposal encompassing financial projections, including a detailed revenue projection, and Profit and Loss Statement of Cash Flow, and Balance Sheet Projections. The Gannon University SBDC also provided loan application assistance.

The clients were positioned to provide sufficient equity cash infusion; had previously established contact with Eriebank, that provided a portion of real estate and equipment financing; and the Gannon University SBDC provided a referral to the Economic Progress Alliance of Crawford County. The group assisted in providing the balance of the financing through its USDA Intermediary Relending Loan Program. The final loan package also included an Eriebank line of credit. The clients closed on the transaction in mid July 2011, and they have successfully operated the business, maintaining the customer base and human resource employment level.

The successful Aetna Machine Company employee buy-out resulted in securing the ongoing presence of an established, viable manufacturing business in Crawford County. Through the initiative of Mary Beth Hummel, Rick Motzing, and Dan Steinbeck and with the cooperative assistance of an aggressive community lender, Eriebank, a local IDC, The Economic Progress Alliance, and the Gannon University SBDC, six jobs were maintained in Crawford County.