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Federal Corporation Purchased After 103 Years of Business

Written by: Evie Klopp Holzer 

John Lippe’s entrepreneurship-through-acquisition approach to business with his recent purchase of Federal Corporation is already netting positives for the more than century-old business.

Federal Corporation is what John Lippe calls a “103-year-old start-up.”

Previously owned and operated by four generations of the Loeffler family, the company provides industrial burner management systems and solutions. Lippe recently purchased the company in a transaction known as entrepreneurship through acquisition, which he studied under Jim Sharpe, a visiting executive at Harvard Business School, when Lippe was earning his MBA there. 

“I thought it was the neatest concept ever because I had always wanted to be a business owner and operator,” Lippe said. “You don’t realize how hard it is for a new company to get off the ground. It takes a lot of venture funding and [resources] to find that product-market fit. I learned about this [concept], and I was like, ‘Oh my goodness. You can buy this business that’s already out there and doing fine. You can come in, shut up, learn and listen. You can get to know your team and what value you provide in the industry — and then you get to innovate on it.’”

Lippe called on thousands of companies before he discovered Federal Corporation. His due diligence included researching the industry and reviewing financial statements, but it also required some personal assessments: What were his overall business goals? How much time did he want to invest in the company and at the company? Could he be passionate about the company’s mission statement? And, perhaps most importantly, he said, did the company’s values align with his own?  

“The hardest thing in your due diligence when you are considering making a huge investment of your time, money and life is the culture – and the culture is all driven by the person that’s been running it,” Lippe said. “If you can align values with the owner, it’s going to be a much smoother transition.”

Aligning values was certainly important to Alan Loeffler, whose grandfather founded Federal Corporation in 1918 and father ran the company for 60 years. He led the business himself for 40 years, and he was in the process of transitioning the company to his son, Daniel, when his son passed away from cancer. Alan Loeffler was ready to retire, so his family business went up for sale.   

“John kept saying to me, ‘I don’t want to mess this up,’” Loeffler said, noting that the two discovered many shared values at the outset. “It was easy to be his cheerleader, because the better I got to know him, the more impressed I was with him. I knew that for there to be a successful transition, that my opinion of this new kid – and he was a kid, in his 30s – would be important to most of our employees. I didn’t want anything but positive opinions to be transferred from me to others, so it would maximize the chance that the company would flourish under John.”

Since taking the reins in January 2020, Lippe has positioned Federal Corporation for regional growth by incorporating new technologies and training opportunities into the business. Lippe considers Loeffler his friend and mentor, and the two continue to meet every few weeks. Recently, Lippe created an employee recognition award in the Loeffler family name. 

Just as Loeffler’s values were shaped by his familial predecessors, the same holds true for Lippe.

“It’s not about business,” Lippe said. “It’s about people. It’s always about people. That’s something my grandma always taught me, and I have definitely felt that since I joined Federal – this incredible legacy.”

Federal Corporation just celebrated 103 years in business. With long-term goals in mind, Lippe hopes to add a hundred more.

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