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I think there is an excellent chance there will be a buyer, or a set of buyers for MTH, given that there is a year to get a deal done. I think there would have been a chance of that happening in Weaver's case, had Joe given more notice before shutting down. Also, MTH is a much bigger company than Weaver was. So, like others, I am actually feeling pretty optimistic at this point.

Pat

1) Thanks to Mike and all the fine employees at MTH for the innovative products over the years!

2) Obviously it's only their business why they would or would not be interested in buying/taking over the company, but keep in mind at least a few of the original employees whose names we all have come to know over the years are friends of Mike from quite a while ago, i.e., in a similar age bracket for a lot of them, most likely.  That's a pretty big "new job" to take on if you are closing in on possibly wanting to retire yourself in the not too distant future.

3) I guess I need to prioritize creating my order list from 2020 V2.  Hopefully with the delay in release, the order deadline has not passed yet.

-Dave

 

Reading between the lines, they've been looking for a buyer for some time and the white knight has not appeared.  Hence the uncertainty in the tone of the message, and the implication that the owner is no longer prepared to postpone retirement.  Both purchase of the company and closing of the company are mentioned, which are opposite outcomes.

I wonder if Mike and a group of his employees will work out a deal where they continue to operate the company and he and his heirs receive a cut of any profits forever,  rather than an employee purchase of the company with a capital investment. Many have said that cash flow is a significant issue in this and similar cottage industries.  Apparently no one outside the company is willing to make a capital investment of a size commensurate with their annual sales.   But this insider scenario could be best for the hobby, the company, and maybe in the long run for its founder and his heirs.  I'd guess he would have preferred someone to come up with tens of millions to buy him out (if he is, as is apparently the case,  a sole proprietor).  For reasons others have mentioned, it hasn't happened.  

It ain't over till it's over. 

Last edited by Landsteiner
@irish rifle posted:

Also, MTH is a much bigger company than Weaver was. So, like others, I am actually feeling pretty optimistic at this point.

That's part of the problem, and IMO not exactly a reason to be optimistic.  It's going to take a lot of capitol to buy it and keep it running, so I'm not nearly as optimistic as you at this point.  I just hope there's some continuity of parts for folks to keep the existing stuff running.

First I want to wish Mike the best in his retirement and a thank you for giving me "model railroad fever." My first set was a RTR 2-6-0 ATSF freight set with an air whistle from MTH.

I personally hope that someone buys MTH and uses all of the fantastic products that Mike and his team produced over the years. If the company is sold off in parts, I hope that whoever buys it will do something similar to Lionel's ERR so the model railroading community can still use the fantastic ProtoSound 3 system.  

 

Bryce

Have a great retirement Mike. You sure shook up and made changes to model railroading. The thing that impressed me most about Mine was when I was at his facility in Maryland training to work on his products. In between sessions I went outside for a smoke break. An elderly gentleman cane up to me and asked if Mike was in town. I heard he was overseas and passed that along to g the guy. He told me he talks with Mike a lot and enjoyed his time with him. To me that was a class act. The owner of a company taking time to see this gentleman whenever he could. A tip if the hat to you Mike Wolfe. Well done. 

Andy E for President!!!!! There I said it first. 

I'm sure much will be written in the ensuing months, but just how much Mike changed the game is undeniable. The man has worked his @$$ off along with Andy and Rich for the last 35 years. This is not an easy business and it's only going to get harder. 

I would love to see the MTHers take up the company but could also see a future where Lionel acquires the locomotive tooling and is able to pull off some interesting projects.

Hold on to your seats folks, this is going to be interesting to see how this plays out. 

Well congrats to Mike. I've got 8 of his Premier steam locomotives and DCS, none of which have given me any real issues. Mike has made a bunch of products that have helped us enjoy the hobby, so thank you for the years of fun.

I've acquired some spare DCS, PS2, and PS3 components over the last couple of years. If production of electronics for the DCS system ends I'll be ok for a bit. When it all finally dies I'll change over to ERR or what ever the equivalent is.

I started in O gauge when I was a child in the early 90s and Lionel was the only game in town. By the late 90's the hobby was in an O gauge renaissance. We had Lionel, MTH, K-Line, Weaver, Williams, and Atlas O cranking out product. 25 years later it'll be down to Lionel again, with a bit of Atlas O sprinkled in.  

Holy Snikees!!!  I wish Mike nothing but the best,  but I didn't expect a retirement announcement without a sales plan, especially with years of electronic products looking for support.   I hope he is able to sell to the employees.   Going from "simply the best way to run a railroad" to I'm taking my ball and going home", is one abrupt change of direction.   As a longtime loyal customer I am not sure if I should be shocked,  disappointed,  or maybe mad as hellgate that the system I have invested a large amount of my money and time in is just closing up shop without a transition plan.  I think I am a bit of all three but mostly the latter. 

The biggest issue I see?  Parts for existing product!  As for the new catalog, who in their right mind will order a complex electronic product when support is vanishing???

Mike told us employees today.  The building sold a month ago, but it was kept under wraps.  Mike said he would support warranty repairs for a year after they close and two employees will be taking over the parts side of the business which includes support for the electronics.  Don and I may consider repairs as a side business as Mike offered that part to us.  If someone purchases the tooling before May (which I doubt will happen), operations would likely be tranferred to the new owner(s).

That's part of the problem, and IMO not exactly a reason to be optimistic.  It's going to take a lot of capitol to buy it and keep it running, so I'm not nearly as optimistic as you at this point.  I just hope there's some continuity of parts for folks to keep the existing stuff running.

John:

I was involved in a lot of M&A deals in my career. There tends to be more opportunity for one of these transactions regarding entities with a larger footprint and a stronger balance sheet. Frequently, these deals are financed. It's not like one or two people, or even another company, are doing an all cash deal. That said, I do not have any inside baseball on what the financial situation is with MTH, nor how things will ultimately turn out. But I do know, if there is interest, there is plenty of time to get a deal done.

Pat

Well, at least with the S Scale, I can gut the electronics and either install DCC or wire up conventional DC.

Rusty

Since I'm also in S scale, I will miss their flextrack more than anything.   Their rolling stock is also first rate.  As far as their motive power, as nice as they are, I will NOT miss their proprietary electronics.  BTW, I'm also not a big fan of Lionel's either.  I've had too many of Lionel's electronics give out.  

I knew Mike when he was at York working for Jerry Williams I believe before there was an MTH. I was sick of the toy-like three rail trains of over 40 years ago and switched to HO. It was the scale like three rail engines that Mike was so instrumental in pioneering that pulled me back. Thanks Mike for everything you have done for our hobby, and VERY sorry to see you go!

Neal

Last edited by PRRMiddleDivision

Kinda ironic I just finished up this afternoon putting up several new display shelves for several new MTH engines coming in...can't say I'm as excited to get them now as I was when I woke up this morning!

I was going to order two locomotives out of the most recent catalog. Not now. Why? As I've told my dealer, I'm more worried about parts and repairs down the road. Why go order more when they could croak and I'm stuck with them, especially brand new.

I think the day is coming where I get out of the hobby. My interest has come and gone over the years. I always have and always will love the hobby but I am not in the market for Lionel's products much - can't afford them and can't run those huge engines on my small layout. Will be watching what happens but I would not be surprised if my entire collection goes to auction one day in the somewhat near future.

The biggest issue I see?  Parts for existing product!  As for the new catalog, who in their right mind will order a complex electronic product when support is vanishing???

My thought as well. Without replacement parts (including control systems), what future do MTH trains have to keep running? Someone better buy the MTH assets or noone is going to want to buy any MTH trains, new or used. It seems reasonable that their market value could tumble. Potential buyers are certainly going to think twice before purchasing an expensive product that can't be repaired.

Bad timing, too, when some dealers are just now taking delivery of new MTH products, including special production items. It was also announced that among the new arrivals are steam engines from MTH's new diecast engine factory. Based on that information, something must have happened very suddenly to MW. Obviously, noone would open a new factory just before shutting down his company.

The very best to Mike. No doubt he sits right behind Josh Cohan in the O gauge hall of fame.

Since MTH has a plant in China, this could be a liability. I have no clue but I would think that getting a bank loan to buy the business with the tooling in a foreign country and at this point no real possibility of expansion, 4 lines of products, may prove difficult. 

I posted this prediction several times on the forum since MTH was not producing any new tooling. I figured Atlas O would drop out first. I am confidant that the items will split like Weaver and carry on for at least a little while longer. There are still a few un-produced items and paint schemes left to offer in O that were overlooked.

Thanks Mike W. and staff for all the great products and making my R.R. dreams come true through the years. I will be right behind you as well.

Good luck and enjoy your retirement! 

S.

I still believe that there is some plan for the company. Why else would his letter specifically state the following...

”One scenario is a new company organized and owned by members of my current staff. Their decades of experience, work ethic, and creative talent will ensure success regardless of who owns the assets while providing a welcome bridge between the past 40 years and the future.”

Maybe there is a corporate buyer that will use the current talent to while moving forward. 

@Jon G posted:

Mike told us employees today.  The building sold a month ago, but it was kept under wraps.  Mike said he would support warranty repairs for a year after they close and two employees will be taking over the parts side of the business which includes support for the electronics.  Don and I may consider repairs as a side business as Mike offered that part to us.  If someone purchases the tooling before May (which I doubt will happen), operations would likely be tranferred to the new owner(s).

Good news for those of us who have the existing product.

@Notch 6 posted:

Andy E for President!!!!! There I said it first. 

I'm sure much will be written in the ensuing months, but just how much Mike changed the game is undeniable. The man has worked his @$$ off along with Andy and Rich for the last 35 years. This is not an easy business and it's only going to get harder. 

I would love to see the MTHers take up the company but could also see a future where Lionel acquires the locomotive tooling and is able to pull off some interesting projects.

Hold on to your seats folks, this is going to be interesting to see how this plays out. 

But Andy and Rich also are looking forward to retirement!

How about Rapido stepping into the game!

That's part of the problem, and IMO not exactly a reason to be optimistic.  It's going to take a lot of capitol to buy it and keep it running, so I'm not nearly as optimistic as you at this point.  I just hope there's some continuity of parts for folks to keep the existing stuff running.

I'd agree with this assessment as well. In the current business climate, it wouldn't be easy to obtain financing for anyone to pay millions for a toy train manufacturer. It's all in the numbers that a potential buyer would see, and future projections. I doubt the company is actually worth nearly as much as some people might imagine. Their building is already sold, much of the tooling is owned by someone else - perhaps the major asset is the "good will" value of the company, and the value of the intellectual property. But if what Superwarp said is true, that the company has been up for sale for years, that's not a good sign.

It's hard to imagine that any employees are going to be able to pull together assets sufficient to purchase the company. Also, if MW is going to bail out right away, that's not good at all. Arrangements are generally made in a purchase agreement for the former owner to stick around for several years during the transition. Lots of unanswered questions - obviously it will be interesting to see what happens next. Someone may take over the parts business, but who's going to make the thousands of replacement parts into the future?

Last edited by breezinup

It will be interesting to see what pans out.

Hypothetically speaking, if the company is sold in pieces and operate independently, then I believe depending on the weakest link, it may cause the others to fail. 

The major issue with many folks will be acquiring the needed electronic components for their sophisticated equipment. 

Should the electrical branch of the firm fails first then, I can't see the locomotive hardware side of the business having a means to  stay afloat.  

Mike must have thought this through, as I can't believe he'd let a business he's built-up over the years from scratch simply vanish or collapse.   

Let's try to remain optimistic.

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