Bak USA is buying out B. Thomas Golisano's ownership of the Buffalo-based tablet company.
"Our shareholders convened earlier today and reached an agreement in principle for a management buyout of Bak USA," the company said in a statement on Friday. "Bak USA will continue to operate as a social enterprise building computers in Buffalo."
The company said it would issue a formal announcement once the deal was finalized. Bak USA has more than 100 employees, said Samantha Pierce, a spokeswoman.
Starting in 2015, Golisano made three investments totaling $30 million in Bak USA, took a seat on the company's board and was announced as a strategic adviser. The billionaire is a former owner of the Buffalo Sabres and the founder of Paychex. The investments were designed to fuel Bak USA's growth.
But the tablet maker, founded by J.P. and Ulla Bak, has endured challenges this year.
The Buffalo News reported in June that the company had terminated 15 workers. And during one week in June, the company missed paying its salaried employees, citing a delay on receiving payment for a large order from Ethiopia. But president Ulla Bak insisted at the time that Bak USA was solvent, remained in growth mode and its sales were strong. Within days, the employees were paid after the payment was received.
Bak USA bills itself as a social enterprise, trying to make a profit while also doing good. The business employs many refugees and immigrants to make affordable electronic devices.
Golisano's investment brought a new dimension to the enterprise. As of fall 2017, he owned more than half of the company.
For any start-up, new capital from outside investors can provide much needed financial fuel, but can also change expectations for growth — and profits. As social entrepreneurs, the Baks place a lower value on profitability than most conventional business people or investors, while giving more weight to the social benefits from creating jobs for refugees and other disadvantaged workers.
What prompted Bak USA's planned management buyout was not clear. A message left with a Golisano representative was not returned on Friday, and Bak USA declined to elaborate.
Bak USA is part of the state's Start-Up NY tax-incentive program. The company is based at Compass East, the former Sheehan Hospital building on Michigan Avenue, just outside of downtown.