One of Wichita's biggest and oldest family-owned companies is family-owned no more.
Summit Materials of Washington, D.C., said Friday that it had completed an acquisition of Cornejo & Sons, a 450-employee, heavy highway paving and construction materials company.
Ron Cornejo, CEO of the company and son of the late Jess Cornejo, who started the company in 1952, said that for the foreseeable future he and his four brothers, including president Marty Cornejo, will remain with the company in their current positions.
Cornejo & Sons also will retain its name and identity, he said.
"Our company is solid as can be," Ron Cornejo said Friday. "In '09 we came off the best year we've ever had."
He said the company was not looking to sell but was approached about it in September.
"It was a very difficult decision," Cornejo said. "I never thought something like this would ever happen to us. But the opportunity was there, and it was just too good to pass up."
Cornejo would not disclose financial terms of the acquisition. Summit officials did not return calls for comment on Friday.
Cornejo said the merger gives Cornejo & Sons an opportunity to continue to grow, strengthen its position and expand far outside the Wichita area. It has mining operations and construction landfills in north and south Wichita and ready-mix plants in east and west Wichita, El Dorado, Howard and Eureka.
He said the sale will not affect Cornejo & Sons' ability to compete for minority contracts. The company hasn't competed for such work since the early 1980s because it has too many employees to qualify.
Summit was established last year to develop itself as a leading company in the aggregates and heavy-side building materials sectors, according to its Web site. It is financed by venture capital firms Blackstone Capital Partners and Silverhawk Capital Partners.
Summit CEO Tom Hill was previously CEO of Oldcastle, a $14 billion manufacturer and distributor of architectural building products and materials.
This is Summit's second entry into Kansas. Last year, it acquired Hamm Inc., a materials and highway construction company in Perry.
Dan Ramlow, executive vice president of the Kansas Contractors Association, a trade group that counts Cornejo & Sons as a member, said that since Summit's 2009 acquisition of Hamm, few things about the company have changed.
"It was a great influx of money and the ability for them to expand," Ramlow said.
He said Hamm's local management remains, as does its identity.
"If the Hamm merger is any indication, it's probably good for the company (Cornejo & Sons)," Ramlow said.
Cornejo & Sons is the city's second big, family-owned construction company to be bought out in the past five years.
In 2005, Ritchie Corp. sold its concrete, asphalt, aggregates and paving companies to Lafarge North America in a $59.75 million cash deal.
Ron Christy, director of the Kansas Family Business Forum at the Center for Entrepreneurship at Wichita State University, said it's smart for Summit to retain local management and Cornejo & Sons' identity.
"I think it's an intelligent decision trying to keep everything operating much the same way as it has in the past," he said.
But some employee turnover is inevitable whenever new ownership is involved.
"There's turnover because of differences in culture, strategies," Christy said.
It will take the passing of time before anyone really knows how new ownership will affect Cornejo & Sons.
"You just don't know how all those things come into play until it's been run for a while (by different owners)," he said.
Because of Summit's deep pockets and its strategy to acquire businesses in very specific sectors, Christy said Summit may have been willing to pay a premium to acquire Cornejo & Sons.
"They're making a strategic buy, and they may value those investments more highly than an investment group," he said.