Portfolio Company Spotlight: The 80-Year History of Schafer Industries

On August 1, 2017, HBM Holdings completed the platform acquisition of Schafer Industries, a leading producer of high-precision, custom-engineered gears and machined parts as well as assembled axles, transaxles, transmissions, brake assemblies and other components for a wide variety of industries.

Founded in 1934 – right in the middle of the Great Depression – Schafer Industries has a deep history built on a foundation of teamwork, respect and a philosophy of “putting the customer first.”  Founded by Otto Schafer, the company’s original focus was to produce gears for race cars.  Mr. Schafer was 37 years old at the time he founded the company in a small shop with one machine.  The company was managed as a family business, with help from his daughter, Kathryn Mary Schafer, who recently passed away at the age of 96 years old.

After becoming a leader in the automobile racing market, Schafer looked to expand its client base and began making precision gears for the aircraft industry.  Soon, the company built a reputation for being a reliable supplier for fine-pitched gears.

Otto Schafer and his family managed Schafer Industries until 1980, when they sold the company to South Bend Lathe, a machine tool manufacturer. The company’s ownership changed hands eight years later, when Bipin and Linda Doshi and Stan Blenke acquired the company.

Under Bipin, Linda and Stan’s leadership, the company experienced growth organically and by acquisition through an expansion of its product offering and client base.  When they took control of the company in 1988, they immediately saw a need to modernize production.  To accomplish this, they invested in CNC machinery and developed quality assurance systems to ensure their customers received excellent service and products.

Between 1992 and 2003, the company completed four add-on acquisitions – two machining companies and two gear manufacturers.  These acquisitions expanded the company’s capacity so they could serve more customers, therefore increasing production.

By 2013, Schafer Industries was an industry leader in specialty gears and axles, propelled by the strategic acquisition from Dana Holdings in 2012 to form Driveline.  This acquisition added significant customers in off-highway vehicles – a tangential customer base and product offering.

Then in 2016, Schafer Industries acquired Custom Gear & Machine, a gear manufacturer with customers in oil and gas, construction and agriculture; this acquisition expanded the customer base for Schafer. By 2016, Schafer Industries solidified their reputation as a leading producer of high-precision, custom-engineered gears and machined parts as well as assembled axles, transaxles, transmissions, brake assemblies and other components.

Today, Schafer Industries Driveline division is the market leader for rear golf car axles.  Their position as a market leader was solidified through investments in design and engineering, creating expertise in special designs.  Beyond Driveline, Schafer Industries has the reputation for being the premier provider of a wide range of highly-engineered gearing solutions. More importantly, they have established a reputation as a market leader in quality, on-time delivery, cost-competitive pricing and precision and custom-engineering.

HBM is proud to be working with the Schafer Industries team.  Looking beyond the superior products the company produces, Schafer’s leadership team built a strong culture that is team-focused and supported by employee pride, while firmly grounded on serving its customers.  They have stayed true to the attributes the company was founded on nearly 80 years ago. We look forward to working alongside Schafer Industries to achieve their long-term strategic priorities and being a part of the company’s history going forward.

For more information on Schafer Industries, please visit their website.