The J. L. Wickham Co. has sold a 30 percent interest in the company to private investors in return for $3.45 million, the Baltimore-based machine toolmaker announced yesterday.
Steve Dubin, Wickham's chief financial officer, said yesterday that the 85-employee company needed working capital so it could expand.
The machines Wickham produces -- which companies such as General Motors Corp. buy to make metal parts -- are expensive, and Wickham needs cash to be able to take new orders, Mr. Dubin said.
Todd A. Parchman, who handled the offering for Ferris, Baker Watts Inc., said the investment company raised the cash from dozens of their clients, most of whom are in the Baltimore-Washington area.
Mr. Parchman said the offering wasn't publicized because federal regulations for private offerings generally limit potential investors to people with either $1 million in net worth or $300,000 in annual income in order to protect less wealthy people against risky financial ventures.
Mr. Dubin said there were no large investors in the latest offering. The two largest investments, he said, were $200,000 and $75,000.
In the past, Wickham -- an 8-year-old firm -- has raised cash from venture capitalists and has borrowed from banks, "but the banking environment is not the greatest right now," Mr. Dubin said.
In a few years, Wickham managers hope to raise additional capital by taking the company public, Mr. Dubin said. But, he said, Wickham probably won't go public until it doubles its current annual revenue level of $10 million.
Despite the recession and layoffs of 11 employees, Wickham has been expanding and winning new contracts, Mr. Dubin said. Wickham's revenues have skyrocketed since 1988, rising from about $500,000 in 1988 to $5.3 million in 1990, he said.