I really don't think $20k is unreasonable to rewrite something for a manufacturer. Chances are they'd change the scope, make requests and he'd need to modernize it and I can easily see something like that taking 1-2 months.. at which point $20k could be very reasonable vs the time and effort it'd take to find someone completely new to your system.
If I was the company though I would make sure that them providing the new source would be part of that $20k though or an agreement that when he no longer offers his services personally, regardless of whether he sells the company or not, that he will also release the source code to them if they are unable to negotiate for it upfront.
I think that would be fair and fulfill both parties concerns.
I personally prefer open sourced solutions as well, but in business that just isn't always practical.
