German firm buys Comtrol, a manufacturer that survived founder's legal trouble, recession

Several days ago, New Brighton-based Comtrol, a low-profile, privately held concern, sold itself for an unspecified amount to a much-larger German industrial sensor business.

That's not big news in a long-booming mergers-and-acquisitions market.

It is significant that Germany's privately held Pepperl+Fuchs, a diversified producer of industrial sensors and other automation technology with $800 million-plus in revenue, plans to invest in and grow Comtrol as a segment of Pepperl's business.

The division, starting Feb. 1, is now: Pepperl+Fuchs Comtrol.

In fact, Comtrol, with 55 employees and $13 million in revenue, expects to increase its workforce this year thanks to Pepperl's investment.

This is good news for family-owned Comtrol, which lacked the financial firepower to expand much beyond domestic markets on its own.

This is a company that almost didn't survive the double whammy a decade ago of the 2008 tax-fraud case of its founder, Robert Beale, 75, and the order-cutback ravages of the 2008-2009 Great Recession that put many industrial concerns out of business.

"The recession was kind of a sucker punch after all that had happened with my family."

Robert Beale is still in prison after being convicted by a federal jury a decade ago of a scheme to avoid paying taxes on $5 million in income from Comtrol, the company he founded in 1981.

"You were the personification of the American dream, only to throw it away because you chose not to pay your taxes," U.S. District Judge Ann Montgomery said at Robert Beale's sentencing.

From 2000 through 2004, according to court documents and testimony, Robert Beale directed a subordinate who handled payroll to pay him in cash through a shell company in order to hide his income.

After the Minnesota Department of Revenue issued subpoenas for payroll documents, Robert Beale removed them from the building and stopped sending invoices. He eventually was paid through cashier's checks, and sent money to Swiss bank accounts, according to court documents.

Jurors convicted him in 2008 on seven counts of tax evasion, conspiracy and fleeing authorities; he owed the federal and state government more than $4 million in unpaid taxes, penalties and interest. Robert Beale and two others were later convicted of conspiracy and obstruction of justice for threatening the federal judge who oversaw the trial. A fourth man pleaded guilty to conspiracy in the case.

The Beale family, following Robert Beale's conviction, went to court to transfer ownership of the company to his former wife, Rebecca Summers-Beale, and several key employees.

Comtrol survived the recession and has grown profitably during the economic recovery.

Comtrol has capitalized on Internet of Things technology and is well known in for its "IO-Link Master" that connects factory automation sensors to the internet cloud, providing data from one or many factories on what's being produced and how efficiently to management.

It also allows management at a diaper manufacturer, for example, to use centralized automation to switch from making a name-brand product to a house brand without any down time to make the "recipe change," according to Bradford Beale.

The purpose is efficient production enabled by the internet that anticipates and avoids the expense of lost product time when making factory-line changeovers.

Bradford Beale credits the success of the company to the employees, particularly during the crisis. They also didn't lay off anyone back then.

"God blessed me with several families that sustained us through the strife," he said last week. "Comtrol and the employees have been the family for me and my mom. It proved a unifying thing."

He particularly credited three longtime executives who saw the company through the crisis period to better times. They are corporate counsel Frederick Dawe, marketing director Rob Iten and Ehssan Taghizadeh, who was president of the company until his retirement and remains a board member.

"And [all] the employees are staying with the new company," Bradford Beale said. "If it weren't for these employees we wouldn't have this company."

"The great thing is that we're adding 10 percent more people this year," he said.