After 24 years in Thunder Bay, GRK Fasteners will move to the U.S. at the end of the year.
About 40 people work at the business on Rosslyn Road, making and selling screws and other construction fasteners.
Uli Walther and his family came from Germany to start GRK's Canadian operations in 1990. Walther sold the company to ITW Construction Canada in 2011, under the condition that the new owners would not move it out of Thunder Bay for at least three years.
Walther said he learned on Tuesday the business will be relocated to Chicago.
"I am saddened, truly saddened, that this is happening," he told CBC News on Wednesday. "This was not the plan."
Although the new owner has fulfilled its three-year commitment, Walther said discussions when the deal was made led him to believe the company would likely stay in Thunder Bay.
"When I said I need more than three years ... [they] said ... 'Look at our records. We are not in business to close businesses we buy, especially when they are financially good and profitable.'"
Mayor calls move 'very unfortunate'
Walther continued to work at GRK Fasteners as president after the sale, but retired last April.
He said the business has been "very profitable" and that sales had increased since 2011.
"We have an excellent, excellent group of people working for GRK," Walther said. "We owe them a lot."
"To see them being no longer employed at the end of the year, that's something which really, really makes it extremely difficult for me."
CBC News tried to contact management at GRK Fasteners on Wednesday afternoon, but was told the company was preparing a news release and would not comment before it was issued.
Thunder Bay mayor Keith Hobbs called the move "very unfortunate."
"It's sad, you know, but that's what happens when international companies... take over a company," he said. "They look at the bottom line; they don't look at what it means to local economies all the time."
"We're going to make overtures to the company ... to stay here, but I don't hold much optimism for them doing that," Hobbs added.
The mayor praised the Walther family for employing so many people over the years they owned GRK Fasteners.
"They've been good corporate citizens," he said.