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Golisano buying 50 percent of Buffalo tablet-maker Bak USA

When Bak USA announced its plans to build affordable tablet computers in a factory in Buffalo, the startup company didn’t have enough money to bring in all of the 100 workers it promised to hire by the end of this year.

Now the company does, thanks to a multimillion-dollar investment from B. Thomas Golisano. The billionaire founder of Paychex is buying 50 percent of Bak USA.

The infusion of money will allow the company, which seeks to do good as it makes a profit, to ramp up its planned hiring and to expand into new markets here and overseas.

“There’s many similarities that we can see between what we want to achieve and what Tom has achieved already, so he’s the perfect fit,” founder JP Bak said during a news conference Monday.

A raft of state and local officials attended the event in Bak USA’s headquarters in the Compass East building, site of the former Sheehan Memorial Hospital on Michigan Avenue. Golisano and Gov. Andrew M. Cuomo participated by teleconference.

Golisano, who declined to say precisely how much he is investing in the company, also is joining Bak USA’s board and is serving as a strategic adviser to the tablet maker. He said he was impressed with the Baks’ tablet because it’s highly functional, it’s priced right, and it’s ready for delivery.

“And, of course, probably the most important thing, it’s built in the United States of America,” said Golisano, a former owner of the Buffalo Sabres.

Company officials said Golisano’s investment ensures that Bak USA can afford the 100 employees it pledged to hire by the end of 2015, and the 267 employees it planned to hire within five years, when it was accepted into the Start-Up NY tax-incentive program last year.

Bak USA’s Buffalo production facility occupies 10,000 square feet on the top floor of the former hospital building and opened in January with 20 employees, including many recent immigrants.

The company is training its next 10 workers, who are expected to start their jobs in May.

JP Bak and his wife, Ulla, previously worked as attorneys in their native Denmark before moving to California and starting a technology company there. They later sold the company and started a business in Haiti that offered badly needed tablet-making jobs to people still recovering from that nation’s devastating 2010 earthquake. The Baks have since sold their Haitian company.

When someone from the U.S. Agency for International Development suggested that the Baks open their next tablet production facility in the United States, the tax breaks offered through Start-Up NY drew the Baks to this area.

“They could have been anywhere on the globe, and they chose Buffalo,” Cuomo said. He told Golisano confidant G. Steven Pigeon about the Baks, and it was Pigeon who urged Golisano to consider investing in the company.

The Baks met with Golisano this spring to pitch the merits of a partnership, and the deal came together Friday.

The company is a small part of Golisano’s portfolio, and he rarely invests in startups, but Bak USA was attractive because Golisano wanted to invest in a company in based in Buffalo, Pigeon said after the event. The Baks projected that they would make 80,000 tablets in their first phase of production. JP Bak said he expects to exceed that goal this year but he did not provide a specific target.

The devices range in price from $100 to $140 and come in Wi-Fi only and 3G models. They primarily are sold in developing countries in Africa, but the company hopes to sell more tablets in the United States and to expand into the small-business, health care and educational markets.

“Tom’s investment will enable us to invest in inventory, for growth. It will make us able to roll out a very ambitious marketing and sales plan, and it will make us able to comply with the governmental rules for being a supplier to the federal government and New York State,” JP Bak said.

Among the officials attending the announcement were Lt. Gov. Kathy Hochul, Erie County Executive Mark C. Poloncarz and Mayor Byron W. Brown.

email: swatson@buffnews.com