David McQueary of Springfield-based pharmaceutical wholesaler McQueary Brothers Drug Co. didn't want to sell the 84-year-old family-owned company, but industrywide consolidation forced his hand. McKesson Corp. acquired McQueary Brothers for $190 million earlier this year.
The Stories That Shaped 2008, No. 5: Veteran hometown businesses sell
Eric Olson
Posted online
Within days of each other in April, two deep-rooted Springfield families announced they were selling their longtime businesses to larger competitors - sending shock waves through the Ozarks and illustrating the economic times.
Banta Foods and McQueary Brothers Drug Co. operated in the city for a combined 187 years. Banta Foods' sale to Reinhart FoodService LLC ended the Banta family's 103-year run, and McQueary Drug's deal with McKesson dethroned the McQueary family after 84 years.
Throw in the March sale of veteran Willow Brook Foods, and it was clear these owners saw the writing on the economic wall.
"I just kind of looked into the future and saw a lot of land mines out there, and it looked a little cloudy to me," Banta Foods President Chuck Banta told Springfield Business Journal in April, after announcing the sale.
Poultry processor Willow Brook Foods could not keep up with soaring feed grain costs and in March sold to Kansas-based Cargill Value Added Meats, a subsidiary of Cargill Inc., America's largest private company with 2007 revenues of $110 billion, according to Forbes.
Industrywide consolidation led to McQueary Drug's $190 million sale to McKesson, a Fortune 500 company and one of the drug industry's top three firms.
At year's end, only one of the three companies - Banta - is still standing.
Willow Brook Foods' deal spelled job losses of nearly 800, after Cargill closed Willow Brook's two Springfield plants. And publicly traded McKesson (NYSE: MCK), a $106 billion global company, chose to shut down its newly acquired Springfield property, which employed about 100, citing the proximity of its seven Midwestern distribution facilities.
Both Cargill and McKesson offered employees relocation and severance packages. The McQueary family shared with its staff $21 million from the sale, based primarily on seniority.
Still, President David McQueary admitted to having a heavy heart through the strategic deal.
"I thought I was going to be here the rest of my life," McQueary said in April, sharing stories of how his co-founder grandfather used to make handshake deals "over coffee at a diner downtown."
"These (employees), some of them I've grown up with. They're an extension of the McQueary family, and we felt like we had to do the right thing by them."
In Banta Foods' case, the name was retained, along with the majority of its 200 employees, and it's been business as usual - only with Chuck Banta as division president for Reinhart FoodService. Reinhart is owned by Reyes Holdings, the 26th-largest private U.S. company with 2007 revenues of $11 billion, according to Forbes.
Selling to a large corporation is often the best exit strategy for smaller companies facing limited options, according to one economist.
"Sometimes about the only way you can survive is to merge with somebody that's bigger," Drury University economics professor Bill Rohlf Jr. said in May.
