Manchester Thrives On Trouble

Neal St. Anthony’s column in the Business section
From Star Tribune, Tuesday, November 30, 1999

A firm headed by another ex-U.S. Banker (which long ago passed Pillsbury as the Twin Cities’ largest corporate alumni club) recently won the 1999 small-company award from the Chicago-based Turnaround Management Association.

Minneapolis-based Manchester Companies, headed by Mark Sheffert, won the award for troubleshooting Medical Graphics in 1997-98, finding a new CEO, shedding extraneous businesses, overhauling the balance sheet, returning the firm to profitability and otherwise prepping it for sale.

The stock had slumped from $5 to 62 cents last year before the turnaround to take hold. Medical Graphics was a profitable, $23 million-revenue firm in 1994. Two years later, amid a poorly executed diversification drive, the company posted a $9 million loss on $20 million in revenues.

Sheffert was named chairman in early 1997, implemented $7 million in annual cost savings and helped refocus Medical Graphics on core competencies that drove increased sales and profitability over the last several quarters.

In September, cash-flush, business-poor Angeion Corp., announced that it would pay $2.15 per share, or $16.3 million, for Medical Graphics, which will become a wholly owned subsidiary of Angeion and a key part of Angeion’s growth strategy.

The combined company will be headed by Richard Jahnke, the chief executive of Vadnais Heights-based Medical Graphics.

It’s considered a nice fit because Angeion, which had abandoned its principal business, has a ton of cash from legal settlements and tax credits, while Medical Graphics has a profitable, growing business.

Manchester, founded in 1989, employs veteran accountants, attorneys and others who provide management talent, turnaround and investment banking services to smaller companies. Sheffert was named one of the four "Outstanding Directors" of the year recently by Twin Cities Business Monthly.

Neal St. Anthony reports on companies, people and trends in the Twin Cities business community. His column appears Tuesday and Friday. He can be reached at 612-673-7144 or nstanthony@startribune.com