Micro Engineering is for sale…

[reinhardtjh]

What then would be the point of anyone spending $500k on tooling that is already worn out or nearing the end of its useful life?

Seems any serious person should well consider starting from scratch anyways (tho that hardly seems likely).

Ed

Well, there is much more than the N-Scale flex molds.  ME has bridges, building kits and then all the switches in the various HO and N codes.  But, yeah, flex is a big part of sales (I assume) so it may be somewhat of a problem.

[C855B]

Frankly, I think the "$500,000" is merely a number to set the bar for prospective interest, a ballpark-ish starting number at best. IOW, forget about shaking quarters out of your piggy bank, don't waste their time unless you have the green to backup your dreams of becoming a MRR manufacturer.

Yes, there's going to be a reckoning given that identifiable, specific products' tooling is either expired or on its last legs. The most basic due diligence is going to reveal that. The question is what percentage of existing production equipment is due for replacement? That video is one I was referring to illustrating the old processes. I, for one, wouldn't be investing in dies to fit that old injector, it's probably being kept running with bailing wire, etc., itself. More modern equipment is available on the used market; there's an outfit in our town moving their sports equipment manufacturing ops to another location they already have, and I suspect some of their injection and spin-molding equipment is up for grabs as they shut the plant down. I know a little about the plant because our kid operated one of their injectors as a summer job a few years back.

I wish us all the best of luck in assuring that ME's product line remains available in some form. It's going to take somebody with the time and deep enough pockets to make it happen, where deep pockets = ~$1M to buy the tooling, rights, name, accounts and have enough left to update and fix tools and pay staff while the new venture gets rolling.

[Rossford Yard]

Do MRR businesses sell differently from other small biz, i.e., either 1 year revenues or 3-7 years profit?  As others have mentioned, I doubt the price would be set by what the original owner had paid for now extinct or nearly so tooling.  There may be some "blue sky" value of the brand, but if it has been inconsistent for several years, I wouldn't pay a lot for that.  Of course, I wouldn't pay much more than $0.50 on the dollar for any LHS stock, since I'm not sure there are many shops with a loyal following that an internet dealer won't steal with $.10 cent cheaper stuff.

I hate to say it, but the biggest value ME might have is for Atlas, Peco to buy out a competitor, taking what little tooling they might be able to make use of, i.e., Atlas buying Life Like, or another vested company, like Kato, Bachman, Intermountain possibly wanting to extend their brand, such as Kato into prototypical flex (I know they have their own brand now, so not a great example.

I do wonder if starting with that, and providing the next gen of track products would be worthwhile, i.e., flex trac with rubberized and realistic built in roadbed as was one attempted in HO, pre-weathered, better electrical rail joiners, and for turnouts, pre-wired in all aspects, narrow depth switch motors built in, perhaps a realistic ground throw device, etc.  Maybe even go back to double and triple yard ladders like Shinohara once tried.  Basically, realistic and reliable scale model track, more RTR than hard to lay.

All that said, I plan to stay firmly on the consumer side of the MR business, but wish them well.  The previous owners deserve to get something out of their multi generational efforts on our behalf.

[railnerd]

https://sanjuancarco.com would be a natural to take over ME— they have been acquiring a lot of tooling and also are very skilled at injection molding.

-Dave

[reinhardtjh]

Posted in the "Hand Laid Track & Turnout Exchange" group on Facebook

Don't sweat it, Fast Tracks will ensure there is always a supply of rail...

For those that don't know, Tim Warris is the founder/co-owner of Fast Tracks.  https://www.handlaidtrack.com/about-us

Of course, he doesn't specify how Fast Tracks will make sure rail is available and makes no mention flex track and ready to use turnouts.

[nkalanaga]

-Dave:  Yes, that would be another natural buyer, and, as was said earlier, narrow gauge modelers are among ME's main customers.  I could see them doing it, and, unlike MT/KD, they have a proven record of buying and running other companies.

[Chris333]

I've paid insane amouts of money for 6 pieces of ME c55 HOn30 flex track. It hasn't been made in 10-15 years. I once asked them to make me some if I placed a big order. They told me it would need to be at least 3000 pieces and they could only do code 70. I didnt want code 70 and was only in for around 100 pieces.

[wazzou]

Posted in the "Hand Laid Track & Turnout Exchange" group on Facebook

For those that don't know, Tim Warris is the founder/co-owner of Fast Tracks.  https://www.handlaidtrack.com/about-us

Of course, he doesn't specify how Fast Tracks will make sure rail is available and makes no mention flex track and ready to use turnouts.

Ha, maybe I was on to something after all.   

[peteski]

Posted in the "Hand Laid Track & Turnout Exchange" group on Facebook

For those that don't know, Tim Warris is the founder/co-owner of Fast Tracks.  https://www.handlaidtrack.com/about-us

Of course, he doesn't specify how Fast Tracks will make sure rail is available and makes no mention flex track and ready to use turnouts.

This begs a question as to whether ME rolled their own track rail, or were purchasing it from an outside source?

[DKS]

This begs a question as to whether ME rolled their own track, or were purchasing it from an outside source?

Pretty sure ME rolled their own. I was involved in the turnout design, so if they didn't, then they put on an elaborate show to make it seem like it.

[JeffB]

This begs a question as to whether ME rolled their own track, or were purchasing it from an outside source?

Rolled their own track?  Or rolled their own rail?

It's my understanding (I could be wrong here), told to me by a modeler that used to work for ME, that they source their NS rail from the UK.  The track itself it done onsite at their facility.

It is unfortunate that they're selling the business.  Makes you wonder if it's going to go the way NWSL did.  The original owners of NWSL sold to a husband/wife team.  They did a great job with the business, but the prices jumped dramatically from the get go.  But at least you could still get nearly the entire line of gears and wheelsets.  Then the wife died and the husband decided to sell to one of his employees (NWSL shared space with his other business, a machine shop). 

The new owner raised prices even more, but you can no longer get (at least not easily) any custom gear stock.  Most wheelsets are now "out of stock", the new owner doesn't appear to be interested in producing anything, just selling off whatever was in stock.  I've heard that they're attempting to turn things around, but then Covid hit and they've lost two employees, so who knows what's going to happen now.

Point is...  This is where the hobby is going.  A lot of these businesses, started/owned by former modelers are getting sold to non-hobbyists, and they die soon after.

Hopefully someone buys Micro Engineering and keeps it going like nothing happened and maybe even improves the line.

JB

[thomasjmdavis]

https://sanjuancarco.com would be a natural to take over ME— they have been acquiring a lot of tooling and also are very skilled at injection molding.

-Dave

I thought that San Juan Car Co had itself been purchased by Leadville Shops- the following is on the Leadville Shops website (and has been for a couple years):

Hi Everyone! I wanted to let everyone know what's been going on lately. As most know, Bob and Doug made the decisive move to acquire Grandt Line, San Juan Car, San Juna Decals, and American Limited Models. That said, they are *extraordinarily* busy managing the logistics of two huge moves from California to Colorado, not to mention learning some serious new ropes and skills. This will take some time.

  All of this gets very confusing.  But given that after San Juan initially bought ALM, N scale product other than diaphragms disappeared (and has remained that way under Leadville ownership), I would not be optimistic that N scale products would get much attention if they purchased ME.  I've had several inquiries to them over the years, apparently the ALM N scale tooling went bad just prior to ALM being acquired by San Juan, and the owners either have no interest in replacing it, or it is so far down the list of priorities that core kits and such have been unavailable for what? 6 years now?

[Maletrain]

If somebody really wanted to produce fine detailed, North American prototype track, then I am not sure that buying ME would be the best way to go.  Unless the tooling and machines ME now has are going to be capable of producing good product for a long time to come, it seems that ME going out of business really only removes an established competitor, making a better opening for some new track making business. 

Buying the ME "name" might help a new business initially, but I don't see that as a big thing.

For consideration: If some new company started producing N scale (effectively) code 40 flex track using Peco's double-flanged rails and plastic ties with  scale sized tie plates and spike heads, would you buy it?  I would - no matter what it is named.  And I am sure I would hear about it by word-of-mouth (or TRW equivalent) in short order if it became available. 

There is definitely a market for that product.  The only question is whether it can be made at a price point that we are willing to pay for large quantities.  Maybe the answer is "No" and that is why we don't already have it.

[Sokramiketes]

Pretty sure ME rolled their own. I was involved in the turnout design, so if they didn't, then they put on an elaborate show to make it seem like it.

I can confirm that the rail was outsourced.  They cut tooling in house for the ties and turnouts.  And shot plastic, obviously, around that rail. 

[Ed Kapuscinski]

I think price increases are going to be a fact of life with this, no matter what.

I'm betting the previous owner was happy with a certain margin and level of revenue, but if anyone with any sense is taking it over, that level is almost certainly going to have to be higher.

If that weren't the case, then I'm sure there wouldn't have to be an announcement about the company being for sale and there'd be an investor ready to take it over.

I don't expect someone to put themselves into poverty to support my hobby.