According to a statement issued by Spellbinders, the company has taken on Pennsylvania-based private equity firm RAF Industries as a “partner”.
RAF Industries is a privately-held private equity fund based in Pennsylvania that specializes in buying successful companies from the entrepreneurs that founded them and then keeping the founder on in the company post-acquisition to continue to provide the vision and drive that made the company successful.
As part of the new relationship with RAF, Jeffrey Caron’s position as Spellbinders CEO has been discontinued. He is now serving in what the company calls a “consulting role”. Dan Simonson is now fulfilling the role of COO at Spellbinders. Simonson joined Spellbinders as Director of Finance in late 2010 after serving as a consultant to the company for two and a half years, giving him almost six years experience with the company.
“Jeff and I are excited to partner with a world-class organization such as RAF Industries. Working with RAF Industries will allow for future growth. It is an affirmation of our continued commitment to bring the most innovative products to the global marketplace,” Stacey Caron says of the new partnership.
So what exactly does “partner” mean? According to documents filed March 15th in the company’s patent infringement lawsuit against Lifestyle Crafts, Spellbinders LLC (the Limited Liability Company founded by the Carons) is now 100% owned by a newly-formed corporation called Spellbinders Holdings, Inc. According to a rep for Spellbinders, the Carons are shareholders in the new holding corporation. Corporate documents filed with the states of Arizona and Pennsylvania list only RAF Industries officers making up the Board of Directors of the new Spellbinders Holdings entity. The Chairman, President and Treasurer of the two companies are identical.
Robert A. Fox, who is Chairman and CEO of RAF Industries, and also Chairman of Spellbinders Holdings, said of the arrangement:
Spellbinders is a great opportunity for RAF and a perfect example of RAF’s philosophy of working with successful entrepreneurs to build world-class companies. We were attracted to Spellbinders because of its exceptional management, its market-leading innovation and considerable growth potential. We are excited about the future prospects of Spellbinders and look forward to working with the Carons.