This Illinois company was just sold for $3 billion, but hundreds of employees are getting a cut. Some will get $800,000.

This Illinois company was just sold for $3 billion, but hundreds of employees are getting a cut. Some will get $800,000.

When private equity firm KKR announced the $3 billion sale Monday of C.H.I. Overhead Doors to steel company Nucor, it created a windfall for hundreds of hourly workers at the plant in tiny Arthur, Illinois, who will receive between $20,000 and $800,000 each when the transaction closes.

The deal represents a huge return on investment for KKR, which bought the garage door manufacturer for $600 million in 2015. For employees, who were vested with equity in the company at no charge, the sale is potentially life-changing.

“I had no idea that was going to be this big of a deal,” said Rhonda Jamison, 60, office manager at C.H.I. Overhead Doors.

Jamison, a 17-year veteran of the garage door company, learned about the sale and her six-figure payout at an all-employee meeting last week. The payouts vary based on seniority and salary, with some long-tenured truck drivers — the highest-paid hourly workers — hauling home upward of $800,000 from the sale.

More than 630 hourly workers and truck drivers will receive an average of $180,000 through the sale, the company said.

Located in Arthur, a village of about 2,100 residents south of Champaign, the 41-year-old company makes garage doors for commercial and residential use. When KKR bought the company in 2015, it allowed all 800 workers — including salaried employees — to participate in the stock ownership plan as a free benefit.

Employees who earned more than $100,000 per year were also allowed to invest their own money into the stock plan.

The program has been rolled out by New York-based KKR at 25 companies in its portfolio since 2011. The garage door manufacturer, which generated KKR’s highest return on investment in more than 30 years, proved the value of the equity plan for both ownership and employees.

“We do it because obviously it’s good for the workers,” said Pete Stavros, 47, co-head of private equity at KKR and chairman of C.H.I. Overhead Doors. “And it turns out, it’s also smart business. It leads to a more engaged, stable, financially resilient, less likely to quit workforce, which yields better outcomes for companies and investors.”

Stavros, an Arlington Heights native whose dad was a union road grader with a Chicago construction company, developed the model for vesting hourly employees with equity ownership at no cost. In addition to an ownership stake, employees were allocated $1 million per year for enhancing the factory, investing in everything from air conditioning to new break rooms and a cafeteria.

Productivity flourished, Stavros said, with revenue growing by 120% and the earnings margin increasing from 21% to 35% during KKR’s ownership of C.H.I.

Last month, Stavros helped launch a nonprofit, Ownership Works, to help proliferate the employee ownership model at more companies.

Founded in 1981, C.H.I. Overhead Doors is the largest employer in Arthur, which is about three hours south of Chicago. The manufacturer, which has had four private equity owners during the new millennium, plans to continue its operations at the same location under the new owner, Nucor, a North Carolina-based steel producer.

The sale, which is expected to close in June, pending regulatory approval, will generate more than $360 million in payouts for 800 employees. Hourly employees will receive about $114 million of the proceeds, while salaried employees will get about $250 million, the company said.

When Stavros announced the deal in front of about 400 employees last Wednesday, with potential payouts projected on a large screen, Jamison and her co-workers were overwhelmed by the news.

“The whole crowd went crazy,” Jamison said. “Grown men were crying. I just about fainted.”

Jamison, who lives in nearby Atwood, will receive “several hundred thousand dollars” from the sale. She plans to pay off her home mortgage and several loans, and use some of the proceeds from the sale to help a grandson with special needs.

She doesn’t plan to quit work anytime soon, however.

“There’s no reason for me to leave,” Jamison said. “I want to stay as long as they’ll have me.”

rchannick@chicagotribune.com

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