Capital + Solutions for Complex Transactions

Transcription

Capital + Solutions for Complex Transactions
DISCLAIMER
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The information presented herein is not fully comprehensive, nor does it
consider specific objectives, circumstances or needs of individual
recipients and is not intended to replace a recipient's own internal
business processes for evaluating proposed transactions. Recipients
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the value, price or income of any security or related investment.
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Wynnchurch Capital – Background and Focus
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Founded in 1999, Wynnchurch Capital is an operationally focused private equity firm investing in middle-market
companies in the United States and Canada
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Team: 22 experienced professionals in Chicago, Detroit and Toronto
Portfolio: 17 active platform companies, with combined sales of over $2 billion
Capital: over $1.1 billion under management; $375 million available for new investments
Investors: deep roster of blue chip institutional investors
Experience: invested in more than 40 platform companies
Operational Focus: use quality performance tools to drive value creation
Focus on Complex Transactions in the Industrial Sector
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Industries: Aerospace & Defense, Automotive & Transportation, Building Products & Materials, Capital Goods, Chemicals,
Energy & Power Services, Industrial Products, Logistics, Metals & Mining, Paper & Packaging and Value Added Distribution
Situations: corporate carve-outs, succession planning, management-led buyouts, turnarounds, underperformers, special
situations, recapitalizations, out-of-favor industries
Company Size: revenues of $50 - $500+ million for new platforms; any size for add-ons
Equity Investment: $10 - $90 million per transaction; significant additional LP co-invest available
Wynnchurch’s History
• Wynnchurch
Founded in
Chicago
1999
• Completed first corporate
• Held final closing of carve-out, AxleTech, from • Opened Detroit
Fund I at $163 million ArvinMeritor
office
2000
• Established affiliate
in Montreal
2002
2004
2005
• Completed 9 complex
transactions during
• Closed Fund II
at $350 million economic downturn
2006
• Completed first
• Exited Student • Sold AxleTech to
Canadian acquisition, Transportation
Carlyle
Unigistix
of America
through IPO
2008
• Opened Toronto
office
2010
• Sold Henniges
Automotive
• Closed Fund
III at $603
million
2011
• Closed 6 new
platforms in
2012
2012
• Sold 4Front
and Webex
• Sold Humanetics
and NSC Minerals
2013
2014
• Sold Android
and closed
Fund I
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Wynnchurch Capital – Investment Philosophy
Value Creation
• Target established market leaders with
sustainable competitive advantages and high
customer loyalty which are undergoing change
• Operational focus to drive performance
improvement
• Identify new market opportunities and provide
capital to pursue them organically or through
acquisitions
Long-Term Focus
• Encourage management teams to focus
on strategy and performance
improvement
• Active investors, not operators; board
level involvement
• Conservative capital structures
• Long term focus (5+ years)
Partnership with
Management
• Solutions-oriented approach leveraging the
company’s strengths
• Inspire managers and employees; align interests
by sharing ownership
• Provide a network of operational and financial
resources to support management
• Wynnchurch principals invest personally in every
transaction
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Wynnchurch Capital – Wynnchurch Seeks to be a Value-Added Partner
Our Resources and Support
Our Approach
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Be a consistent and reliable investor
Establish clear and agreed upon expectations
Tie operational initiatives and allocate
resources consistent with strategic vision
Dedication to efficient and consistent metric
based reporting processes
Support constant learning and development
• Measure what is important
• Advanced business systems and tools for
strategy and employee development,
communication and metrics
• Sourcing experience
• Resources and processes for identifying add-on
acquisitions
• Diverse operational and industry-specific
expertise residing with seasoned investment
team
Our Commitment and Results
Our Culture
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Commitment to trust and integrity
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Expedient and discreet diligence process
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Communicate effectively and transparently
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Certainty of closing deals in short time frames
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Discipline – prepare and listen
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Work respectfully with management partners
Proven record of value creation in partnership
with management
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Hold ourselves accountable
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Over 100 years of combined investing
experience
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Wynnchurch Capital – Corporate Carve-outs
Wynnchurch is an active acquirer of non-core assets of corporations
Portfolio Company
United States Pipe and Foundry
Company, LLC
Sector
Business Description
Water
Infrastructure
Headquarters
Year
Ductile iron pipe products and
fittings. Acquired from Mueller
Water Products, Inc. (NYSE:MWP).
Add-on Griffin Pipe Products
acquired from Amsted Industries
Birmingham, AL
2012/2014
Manufacturing
Precision metal stamping and
fabrication components
Denton, TX
2013
Defense & OffHighway
Gearbox, axle and transfer case
products. Acquired from
Accuride Corp. (NYSE:ACW)
Livermore, CA
2011
Industrial,
Automotive
Coated materials for industrial and
automotive applications. Acquired
from EaglePicher Corporation
Dearborn, MI
2010
www.uspipe.com
Sample Product
Imperial Group, L.P.
www.imperialgroup.com
Fabco Automotive Corporation
www.fabcoautomotive.com
Wolverine Advanced Materials
www.wamglobal.com
Henniges Automotive, Inc.
Automotive
www.hennigesautomotive.com
Vehicle sealing systems. Acquired
from Metzeler Automotive / GDX
Automotive
Auburn Hills, MI
4Front Engineered Solutions
Niche
Manufacturing
Loading dock equipment and
products. Acquired from SPX Corp.
(NYSE:SPW)
Aftermarket,
Automotive
Specialty vehicle drivetrain systems.
Acquired from ArvinMeritor
(NYSE:ARM)
www.4frontes.com
AxleTech International
www.axletech.com
Carrollton, TX
Troy, MI
2007 – 2010
Sold to Financial
Investor
2006 – 2012
Sold to Strategic
Investor
2002 – 2008
Sold to Financial
Investor
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Wynnchurch Capital – Underperformers, Turnarounds, Special Situations
Wynnchurch Capital specializes in underperforming and cyclical businesses facing strategic, operational or market
challenges which require a systematic approach to solving problems and improving performance
Portfolio Company
Company, LLC
Sector
Sample Product
Headquarters
Year
Water
Infrastructure
Water Products, Inc. (NYSE: MWP).
Birmingham, AL
2012/2014
Aerospace &
Defense
Manufacturer of military and
commercial aircraft applications
Bedford Park, IL
2012
Automotive
Roof rack systems and cargo
management products
Pontiac, MI
2010
Building
Products
Fastening tools for residential and
commercial construction
Cincinnati, OH
2009
Testing and
Measurement
Safety testing instrumentation and
measurement equipment
Plymouth, MI
2009 – 2013
Sold to Financial
Investor
Automotive
Automotive
Aftermarket,
Automotive
(NYSE:ARM)
www.uspipe.com
Northstar Aerospace, Inc.
www.nsaero.com
JAC Products, Inc.
www.jacproducts.com
Senco Brands, Inc.
www.senco.com
Humanetics Innovative
Solutions
www.humaneticsatd.com
www.hennigesautomotive.com
Auburn Hills, MI
Troy, MI
2007 – 2010
Sold to Financial
Investor
2002 – 2008
Sold to Financial
Investor
www.axletech.com
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Wynnchurch Capital – Management Sponsored Buyouts
Wynnchurch is a value-added partner to teams seeking to position their businesses for profitable growth
Portfolio Company
Ironform Holdings Co.
Sector
Sample Product
Headquarters
Year
Manufacturing
Precision metal stampings and fabricated
components
Chicago, IL
2013
Niche
Manufacturing
Specialty engineered fibers
Hampton, NH
2012
Energy Equipment
& Services
Derricks and related offshore and onshore
equipment and services
Broussard, LA
2012
Mining
Construction
Electrical and mechanical services
Rouyn-Noranda, QC
2012
Building Products
High-quality modular homes
Saint-Apollinaire, QC
2010
Energy Services
Industrial instrumental and
electrical services
Calgary, AB
2008
Powered suspended access and
safety solutions
Seattle, WA
2006
Producer and distributor of
rock salt
Saskatoon, SK
www.dtmp.com
Foss Manufacturing
Company, LLC
www.fossmfg.com
Loadmaster Derrick &
Equipment, Inc.
www.loadmasterderrick.com
Groupe Moreau
www.moreauelectrique.com
Pro-Fab Group Inc.
www.profab.ca
Surepoint Technologies
Group Inc.
www.surepoint.ca
Safeworks, LLC
Safety Products
www.safeworks.com
NSC Minerals Ltd.
Chemicals
www.nscminerals.com
2011 – 2013
Sold to Financial
Investor
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Wynnchurch Capital – Automotive Experience
Wynnchurch Capital is widely known for deep expertise in the automotive industry. We continually analyze the
sector globally to identify strategic investments
Portfolio Company
Sector
Sample Product
Headquarters
Year
Industrial,
Automotive
Dearborn, MI
2010
Automotive
Roof rack systems and cargo
management products
Pontiac, MI
2010
Aftermarket,
Automotive
Automotive aftermarket
replacement parts. Acquired from
Visteon Corporation / Proliance Intl.
Nashville, TN
2009
Automotive
Automotive sequencing and subassemblies
Auburn Hills, MI
2004
Solid to Strategic
Investor
Testing and
Measurement
Plymouth, MI
2009 – 2013
Sold to Financial
Investor
Automotive
Automotive
www.wamglobal.com
JAC Products, Inc.
www.jacproducts.com
Vista-Pro Automotive, LLC
www.vistaproauto.com
Android Industries, LLC
www.android-ind.com
Solutions
www. hennigesautomotive.com
Auburn Hills, MI
2007 – 2010
Sold to Financial
Investor
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Wynnchurch Capital – Industrial Products Experience
Wynnchurch Capital pursues unique opportunities to help management teams of industrial products businesses
transform through acquisitions and organic growth
Portfolio Company
Company, LLC
Sector
Water
Infrastructure
www.uspipe.com
Sample Product
Headquarters
Year
Birmingham, AL
2012/2014
Chicago, IL
2013
Manufacturing
Precision metal stamping and
fabrication components
www.dtmp.com
Senco Brands, Inc.
Building
Products
Cincinnati, OH
2009
Seattle, WA
2006
www.senco.com
Safeworks, LLC
Safety Products
Powered suspended access and
safety solutions
www.safeworks.com
Solutions
Testing and
Measurement
Plymouth, MI
2009 – 2013
Sold to Financial
Investor
Niche
Manufacturing
Loading dock equipment and
products. Acquired from SPX Corp.
(NYSE:SPW)
Carrollton, TX
2006 – 2012
Sold to Strategic
Investor
Aftermarket,
Automotive
(NYSE:ARM)
Troy, MI
2002 – 2008
Sold to Financial
Investor
4Front Engineered Solutions
www.4frontes.com
www. axletech.com
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Wynnchurch Capital – Portfolio Companies Seeking Add-Ons
There is no minimum size or geographic criteria for add-on acquisitions
Portfolio Company
Company, LLC
Sector
Water
Infrastructure
www.uspipe.com
Sample Product
Headquarters
Birmingham, AL
Year
2012/2014
Manufacturing
Precision metal stampings, fabricated
components
Chicago, IL
2013
Energy Equipment
& Services
Derricks and related offshore and onshore
equipment and services
Broussard, LA
2012
Aerospace &
Defense
Manufacturer of military and
commercial aircraft applications
Bedford Park, IL
2012
Fabrication
Military vehicles, radar and other
defense systems
Chesterfield, MI
2012
Industrial,
Automotive
Dearborn, MI
2010
Building
Products
Cincinnati, OH
2009
www.dtmp.com
Loadmaster Derrick & Equipment,
Inc.
www.loadmasterderrick.com
www.nsaero.com
Burtek Enterprises, Inc.
www.burtekenterprises.com
www.wamglobal.com
Senco Brands, Inc.
www.senco.com
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Wynnchurch Capital – Canadian Experience
Wynnchurch Capital is committed to building its Canadian investment portfolio through investing in wellpositioned, Canadian businesses undergoing change
Portfolio Company
Sector
Groupe Moreau
Sample Product
Headquarters
Year
Mining
Construction
Electrical and mechanical services
Rouyn-Noranda, QC
2012
Building Products
High-quality modular homes
Saint-Apollinaire, QC
2010
Energy Services
Industrial instrumental and
electrical services
Calgary, AB
2008
Transportation
Third-party logistics and
transportation services
Toronto, ON
2006
Chemicals
Producer and distributor of
rock salt
Saskatoon, SK
2011 – 2013
Sold to Financial
Investor
Supply chain management
solutions and specialized thirdparty logistics
Brampton, ON
2002 – 2004
Sold to UTi
Worldwide, Inc.
www.moreauelectrique.com
Pro-Fab Group Inc.
www.profab.ca
Surepoint Technologies
Group Inc.
www.surepoint.ca
Calyx Transportation Group Inc.
www.calyxinc.com
NSC Minerals Ltd.
www.nscminerals.com
Unigistix Inc.
Business Services
www.unigistix.com
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Case Study
4Front Engineered Solutions, Inc.
Company
Investment Rationale
• Headquartered in Carrollton, Texas, 4Front Engineered
Solutions, Inc. (“4Front”) is a leading manufacturer of a
complete line of loading dock equipment for a premier list of
global customers
• US market leader with market share in excess of 50%
• 4Front’s product line consists of mechanical, air-powered and
hydraulic dock levelers, seals and shelters, trailer safety
restraints, specialty dock doors, material handling lifts, and
aftermarket parts and accessories
• A substantial amount of revenue derived from retrofit
opportunities, accessories and aftermarket parts
• 4Front's premier products include Kelley, Serco, TKO and APS
Resource branded equipment
Transaction
• In partnership with management, Wynnchurch acquired
substantially all of the assets of SPX Dock Products, now
commonly known as 4Front, in October 2006
• Exclusive distribution network is a key asset providing a
competitive barrier
• Long history of product innovation
• Substantial portfolio of intellectual property (over 200 patents
and trademarks)
Wynnchurch Value Creation
• Implemented initiatives to refine and improve distributor network
• Improvement of product mix with emphasis on aftermarket
• Aggressively pursued productivity programs
Wynnchurch Sale of 4Front
• Wynnchurch sold 4Front to a strategic and financial investor
group in January 2013
• Following the acquisition SPX Docks Products, the Company’s
name was changed to 4Front Engineered Solutions in
recognition of its position as market leader
Situation
• Before the acquisition, SPX Dock Products was owned by a
large public industrial conglomerate, SPX Corporation, and was
deemed non-core to its operations
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Case Study
Android Industries, LLC
Company
• Android Industries, LLC (“Android”) is a leading sub-assembler
and sequencer of complex modules for automotive OEMs,
including engine, suspension, axle, tire & wheel and instrument
panel modules
• Strong management team and culture
Transaction
• Wynnchurch purchased a majority equity stake in the company
in February 2004
Situation
• Founders were looking to diversify their net worth and
recapitalize the business, while seeking an equity capital
partner interested in funding significant growth opportunities
Android was developing
• Wynnchurch was selected as management’s partner to provide
the capital and strategic resources to better position Android
to take advantage of burgeoning market opportunities
• Technology and process industry leader in outsourced complex
assembly and sequencing
• Exceptional quality and delivery service levels
• Attractive financial profile and organic growth platform
• Continue to expand the Company's footprint into new platforms,
new geographies, new applications and new customers
• Build upon and expand the Company’s market leading position as
the technology and innovation leader in complex assembly and
sequencing operations
• Augment and expand the management team and Board of
Directors with world class automotive resources
Wynnchurch Sale of Android
• Wynnchurch sold Android to a strategic investor in January 2014
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Case Study
Burtek Enterprises, Inc.
Company
• Burtek Enterprises, Inc. (“Burtek”), headquartered in
Chesterfield, MI, is a designer, manufacturer and tester of
systems for mobile military ground vehicles, radar platforms
and other systems for the Department of Defense and leading
prime contractors
• Revenue diversified across product type and aligned with defense
spending priorities; Burtek is positioned to benefit from the shift
in government spending away from offensive systems to mobile
and defensive machinery and equipment
• Burtek targets mature and early-stage defense programs that
will meet the long-term “mobility, survivability and
affordability” goals of the U.S. defense establishment
• High customer relevance evidenced by portfolio of supplier
awards received from key customers
Transaction
• Longstanding relationships with key military suppliers
• Strong team, including a series of senior hires bringing years of
experience working with military agencies
• Prior to the acquisition by Wynnchurch, Burtek was a whollyowned subsidiary of Guardlink International, Inc., and was
placed in receivership in October 2011
• Ownership of IP associated with specialized trailer manufacturing
• Wynnchurch partnered with a strong management team and
acquired substantially all of the assets of Burtek out of
receivership in February 2012
• Pursue strategic acquisitions
Situation
• Continue fixed cost reduction efforts to optimize operating
leverage
• Guardlink International, Inc., a wholly owned subsidiary of
Rabintex Industries, Ltd, acquired the stock of Burtek in March
2007
• Enhance business development capabilities to penetrate
commercial market
• Over the two years prior to the Wynnchurch acquisition, Burtek
and its parent faced a number of challenges, defaulted on bank
loans and Burtek was placed into receivership
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Case Study
Calyx Transportation Group Inc.
Company
• Calyx Transportation Group Inc. (“Calyx”) is a leading provider
of logistics and transportation services to the Canadian
marketplace, including intermodal freight forwarding,
international ocean/air freight forwarding, contract
warehousing, dedicated truckload and LTL, as well as
specialized LTL
• Excellent historical performance
Transaction
• Significant growth opportunities
• Industry consolidation opportunity with favorable trends
• Diversified blue-chip customer base
• Wynnchurch purchased a majority interest in Calyx in May
2006, via a recapitalization in partnership with Calyx's
management team
Situation
• Re-invest in sales infrastructure for ground transportation and
other strategic business units
• Wynnchurch saw significant growth opportunity in the logistics
and transportation sector and identified Calyx as a strong
platform for growth, including acquisitions
• Rationalize customers, facilities and headcount while improving
operating margins
• Migrate to a modern, unified IT platform to improve efficiency
and reporting
• Wynnchurch is partnering with management to take advantage
of the attractive market dynamics in the logistics sector to grow
this investment platform
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Case Study
Fabco Automotive Corporation
Company
• Fabco Automotive Corporation (“Fabco”) is a North American
supplier of highly engineered, specialty gearbox, axle and
transfer case products for all-wheel drive, medium and heavy
duty vehicles used in severe service applications
• Leading market position in niche industry
Transaction
• Wynnchurch partnered with Monroe Capital to acquire Fabco
in September 2011
Situation
• Strong platform for add-on acquisitions with significant accretive
synergies
• Longstanding customer relationships/ significant relevance to
customer
• Diversified end markets
• Strong cash flow profile
• Fabco was a subsidiary of Accuride. Though purportedly the
most profitable division of Accuride, Fabco was slated as noncore and Accuride sought to divest Fabco in 2008/2009
• Several strategic add-on opportunities
• The sale of Fabco was put on hold when Accuride filed chapter
11 in 2009
• Increase in part sales due to larger installed base
• Wynnchurch approached Accuride on a pre-emptive basis in
the Spring of 2011
• Growth of recently awarded programs
• Product cost reduction through low cost sourcing
Fabco Acquisitions
• Fabco acquired R. Cushman & Associates (“Cushman”) in March
2012, diversifying Fabco’s customer base and expanding sales and
engineering capabilities
• In May 2013, Fabco acquired GHM Transmission Gmbh (“GHM”),
headquartered in Steyr, Austria. GHM provides international
growth opportunities and further expands Fabco’s engineering
capabilities.
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Case Study
Foss Manufacturing Company, LLC
Company
• Foss Manufacturing Company, LLC (“Foss”) is a leading
producer of non-woven fabrics in North America
• Differentiated positions as niche fiber solution provider
• Headquartered in Hampton, NH, Foss has developed innovative
non-woven, environmentally friendly and anti-microbial fiber
solutions
• Operating strategy provides flexibility to support growth plan
• Foss serves a wide variety of industries and applications
including automotive, commercial, residential, municipal/civil,
craft/hobby, marine and medical
Transaction
• Foss was on a strong growth trajectory and sought to partner
with an operationally-focused investor to support its long-term
growth plan
• Wynnchurch invested growth capital in Foss in December 2012
• Accomplished management leading growth plan
• Effective barriers to entry and switching costs
• Work with management to support the successful
implementation of Foss’ strategic growth plan. Key growth areas
include:
• Capture additional share in the auto industry as nonwoven content per vehicle increases
• Significant growth potential in big box channel through
additional store penetration and product ramp
• Housing sector recovery expected to drive carpet demand
at a growth rate higher than GDP
• Ramp up of new Georgia facility will allow Foss to manufacture
more efficiently, improve logistics, and give Foss a location closer
to most of its major customers and suppliers
• Continue to pursue both organic and inorganic growth in existing
and new markets
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Case Study
Henniges Automotive Holdings, Inc.
Company
• Henniges Automotive Holdings, Inc. (“Henniges”) is a leading
designer and manufacturer of a complete line of highlyengineered vehicle sealing systems and anti-vibration products
• Strong market share
• Sells to all major North American and European automotive
OEM customers including: General Motors, Ford, Chrysler,
BMW, Daimler, Volkswagen, Audi, Skoda, PSA and others
• Second largest global supplier of automotive sealing systems in
the world with 16 facilities located throughout the United
States, Mexico, Canada, Germany, the Czech Republic and
China
Transaction
• Wynnchurch Capital purchased Metzeler North America in
September of 2007
• In December of 2007, Wynnchurch Capital purchased GDX
Automotive and combined the two businesses under the
leadership of a Wynnchurch installed management team
• Combination of Metzeler and GDX created the leading supplier
of vehicle sealing systems in North America and the #2 supplier
globally
• Broad global footprint
• Attractive valuation
• Conservative capitalization
• Significant improvement opportunity
• Top-grade management team
• Lean transformation
• Rollout advanced management systems
• Focus on higher growth platforms and higher-content vehicles
• Invest in enhanced technological initiatives
• Implement robust, company-wide IT system
Wynnchurch Sale of Henniges
• Wynnchurch sold Henniges to a financial buyer in 2010 retaining a
minority ownership position
Situation
• Henniges represented a significant turnaround opportunity as
the GDX business had lost well over $40 million prior to
Wynnchurch merging GDX and Metzler to form Henniges
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Case Study
Humanetics Innovative Solutions, Inc.
Company
• Humanetics Innovative Solutions, Inc. (“Humanetics”) is a
leading global supplier, designer and manufacturer of
sophisticated crash test dummies, associated technical support
and laboratory services
• Consistent / high margin business
• The Company is a market leader in the development and
supply of finite element software used in computerized crash
test simulations and also provides static and dynamic strain
measurement products and services
Transaction
• Wynnchurch initially invested in Humanetics (Safety
Technology Holdings) in November 2009
• Strong customer relationships
• Global leader in regulated market
• Buying at a cyclical low
• Significant cost improvement opportunities
• Professionalize management processes and tools
• Growth through new product development efforts and expansion
into new geographies
• Increase capacity and throughput with investment in machining
equipment and engineering resources
• Drive cost reductions through product harmonization
Wynnchurch Sale of Humanetics
• Wynnchurch sold Humanetics to a financial sponsor in October
2013
20
Case Study
Company
• Ironform Holdings Co. (“Ironform”), through its ownership of
Detroit Tool Metal Products, Co. (“DTMP”) and Imperial Group
Manufacturing, Inc. (“Imperial”), is a leading metal fabricator
serving the agriculture, bus, construction, heavy truck,
industrial equipment, off-highway, and specialty vehicle end
markets in North America.
• Leading industry executive and supporting management team
• DTMP and Imperial each do business using their respective
brand names under the Ironform umbrella.
• Blue chip customers serving favorable end markets
• Ironform supplies light, medium, and heavy gauge precision
metal stampings, fabricated components and value-added
assemblies, and its capabilities include cutting, forming, hand
and robotic welding, machining, painting, and assembly.
• Ironform has facilities located in Missouri, Tennessee, Texas,
Virginia, and Washington.
Transaction
• Wynnchurch acquired DTMP and Imperial in June and August
2013, respectively.
Situation
• DTMP and Imperial have complimentary manufacturing
capabilities, serve similar, overlapping customer bases, and
together create a metal fabricator with a unique and attractive
geographic footprint. DTMP and Imperial each present the
opportunity for significant operational improvement, and the
combination allows for the realization of meaningful synergies.
• Significant operational improvement opportunities
• Attractive industry dynamics
• Strong platform for add-on acquisitions
• Attractive equipment and manufacturing capabilities
• Complete replacement of incumbent management
• Wynnchurch-backed, experienced management team will lead
turnaround and consolidation of underperforming facilities
• Lean implementation and significant process improvement across
all functional areas
• Support management in diversifying Ironform’s customer base
and end-market exposure
• Through acquisitions, Wynnchurch and management will seek to
create an industry-leading supplier with unparalleled scale,
capabilities, and geographic footprint
21
Case Study
JAC Products, Inc.
Company
• JAC Products, Inc. (“JAC”) is the leading global supplier of roof
rack systems and cargo management products to the global
automotive industry
• Global market leader with attractive competitive position
• Offers a broad array of market leading, unique and often
patented/proprietary products to more than 20 major OEMs
and over 110 platforms globally
Transaction
• Wynnchurch acquired JAC in December 2010
Situation
• JAC was burdened by the downturn in the global automotive
industry, poor operating systems, and a difficult to digest
takeover of the book of business of a failed competitor
• Significant scale and barriers to entry
• Significant opportunity to drastically improve operations
• Strong customer relationships
• Exceptional revenue visibility with booked business through 2015
• Strong engineering and design expertise with over 100 active
patents
• Total overhaul of management team (CEO, CFO, COO, HR, supply
chain, finance)
• Lean implementation and dramatic improvement in
manufacturing and procurement activities
• Develop and execute long term strategy initiatives to drive
growth, cost reduction and margin improvement
• Intelligently grow in emerging markets with a focus on Brazil and
China
• Develop and expand cargo management product offering
22
Case Study
Loadmaster Derrick & Equipment, Inc.
Company
• Loadmaster Derrick & Equipment, Inc. (“Loadmaster”) designs,
fabricates, installs, inspects, and repairs offshore derricks,
onshore masts, and related equipment for a global base of
shipyards, engineering firms, and drilling contractors
• Strong management team
Transaction
• Wynnchurch purchased a majority equity stake in Loadmaster
in September 2012
• Leading market position in design and fabrication of new derricks
• Reputation for high quality and strong technical capabilities
• Global addressed market with few competitors
• Opportunity to grow market share and product portfolio
• Benefit from replacement and upgrade of global jackup rig fleet, plus
untapped onshore opportunities
Situation
• Founders were looking to diversify their net worth and
recapitalize the business, while seeking an equity capital
partner interested in funding significant growth opportunities
Loadmaster was developing
• Sustained revenue, market share gains - Target acquisitions that
diversify customer and product base
• Wynnchurch was selected as management’s partner to provide
the capital and strategic resources to better position
Loadmaster to take advantage of market opportunities and
position the company as an attractive acquisition target in the
offshore oil and gas equipment business
• Margin improvement – Improve cost and financial reporting to improve
sales mix and optimize sales team focus
• Human Capital - Professionalize management processes and tools in IT,
sales and operations
• Create culture of continuous improvement
23
Case Study
Groupe Moreau
Company
• Groupe Moreau (“Moreau”) is an electrical and mechanical
contractor that serves the mining, industrial and commercial
markets in Northern Quebec, Alberta and Ontario
Transaction
• Wynnchurch partnered with Caisse de dépôt et placement du
Québec and the Moreau family to acquire Moreau in June
2012
Situation
• The Moreau family was selling the business for liquidity and
estate planning purposes
• Wynnchurch partnered with Caisse de dépôt et placement du
Québec and the Moreau family to capitalize on growth
opportunities in Moreau’s served markets
• Leading provider of electrical and mechanical contractor services
to the mining sector
• Positioned as the largest of three businesses competing on
regional, remote resource projects
• Customer relationships with the most prominent mining and
energy companies going back 20+ years
• Strong market demand driven by increased oil sands expansion
and Le Plan Nord, which is a commitment by the Quebec
government to spend $80 billion over the next 25 years
• Identified over $400 million of major projects with existing
customers which it believes is conservative
• Upgrade sales/project management processes as well as
expanding geographies and services
• Strong opportunity to sell additional services through existing
channels: the Company has also begun offering services such as
tank and hoist installation and crane rental services to utilize
spare capacity in its crane fleet
24
Case Study
Company
• Northstar Aerospace, Inc. (“Northstar”) is a leading
manufacturer of flight-critical and non-flight-critical parts for
military and commercial aircraft applications
• Focus on highly engineered products with long-term customer
relationships with Boeing (30+ years), GE Aviation (30+ years),
Hamilton Sundstrand (35+ years), Honeywell International Inc.
(50+ years), and Sikorsky Ltd. (30+ years)
• Provides a broad base of complex and highly engineered
products including gears, housings, assemblies and shafts for
helicopter transmission systems
• Enviable position on the two most attractive military helicopter
programs in the world (Apache and Chinook)
Transaction
• Exceptionally high barriers to entry and switching costs
• Wynnchurch acquired substantially all of the operating assets
of Northstar through insolvency proceedings in both the U.S.
and Canada in August 2012
• Significant opportunities to improve operations, take out costs,
and implement advanced management systems
Situation
• Formerly a public company listed on the Toronto Stock
Exchange, Northstar became financially distressed as a result of
a number of external factors and certain legacy liabilities
• Lean implementation and improved operating performance
• Locked in extremely attractive long term commercial terms with
Boeing prior to closing the transaction
• Singular focus on improved quality and performance metrics
• Top-grade management team (CEO. CFO, quality, engineering,
continuous improvement, business development, finance, supply
chain)
• Pursue additional commercial and military programs
25
Case Study
NSC Minerals Ltd.
Company
• NSC Minerals Ltd. (“NSC”) is a leading producer and distributor
of highway de-icing and industrial rock salt to Western Canada
and the North Central U.S. where it holds a dominant market
position
• NSC is insulated from economic volatility; revenue is not driven by
traditional economic metrics, but rather weather in western
Canada and overall infrastructure growth in the region
• Rock salt supply is a critical public safety need as it is used for
road de-icing. There are no cost-effective substitutes and the
cost of rock salt is not material relative to potential safety (road
accidents) and commercial (business disruption) risks
Transaction
• Wynnchurch partnered with a strong management team and
acquired a majority interest in NSC in December 2011
• Reliable, long-term salt supply through multi-year, exclusive
contracts
• Strong management team, including current CEO, who founded
the business 23 years ago
• Strong long-term customer relationships
• Identify and pursue complimentary add-on acquisitions
Situation
• Pursue growth opportunities through expanding product line and
customer base
• The management team and founder were looking for crossborder experience to help them grow in the United States
• Build on recent success moving into new geographic markets
• Wynnchurch’s Canadian heritage and our knowledge of the
industry were key factors in Wynnchurch being selected as the
buyer
Wynnchurch Sale of NSC
• Wynnchurch sold NSC to a financial investor in October 2013
26
Case Study
Pro-Fab Group Inc.
Company
• Pro-Fab Group Inc. (“Pro-Fab”) is a fully-integrated
manufacturer of high-quality modular homes in eastern
Canada with a strong reputation and brand over the last 20
years and leading market share in Quebec and Ontario
• Niche market leader with superior quality and favored brand
• Broad offering of over 200 models with average home sizes
between 1,300 and 1,700 sq. ft.
• “Direct distribution” business model with strategically located
sales sites
Transaction
• Wynnchurch acquired Pro-Fab in July 2010 and Guildcrest
Homes in June 2012
• Fully-integrated with complete range of services (sales, design,
manufacturing and construction)
• Value proposition of modular homes – controlled factory
environment, faster lead times and superior quality
• “Direct distribution” model creates strong brand with the
customer and enables Pro-Fab to control quality throughout all
stages of the production and delivery process
Situation
• Improve quality control and lean manufacturing to recognize
significant operational improvement potential. A CFO was
retained within 3-weeks of the acquisition
• Three non-active shareholders were seeking liquidity and
management wanted a financial partner that could not only
provide growth capital, but also help execute on its strategic
growth plan
• Streamline management responsibilities and provide company
with a strategically-engaged board
• Refocus sales effort to maximize profitability through growing
sales in high contribution margin product lines
• Senior management team invested with Wynnchurch
• Provided company with ample capital availability via overequitized balance sheet
customer base
27
Case Study
SafeWorks, LLC
Company
• SafeWorks, LLC (“SafeWorks”) is the North American leader in
the manufacture, sale and rental of powered suspended access
and safety solutions for commercial and industrial applications
as well as the wind energy market
• Impressive management team and management systems –
generated strong operating performance though down cycle
Transaction
• Complex risk profile that could be managed and improved
• Wynnchurch acquired SafeWorks in August 2006
• Vertically integrated business model drove exceptionally
attractive cash flows
Situation
• The former owners of the business had held their investment
for almost 10 years and were looking for a liquidity event after
enduring a cyclical downturn
• Wynnchurch got involved in the transaction after the former
process to sell the business failed
• Wynnchurch identified SafeWorks as a niche market leader
that could grow into new end markets and applications with
the help of a supportive capital partner
• Leading competitive position with highly recognized and
respected brands
• Strategic realignment of resources to exit risky permanent
installation business and enter the wind energy segment
• Grow international business and expand geographic footprint
• Accelerate new product development in both legacy and new
markets
• Focus on professionalizing manufacturing operations and material
cost takeout program
28
Case Study
Senco Brands, Inc.
Company
• Senco Brands, Inc. (“Senco”) is a leading designer,
manufacturer and distributer of branded pneumatic and
battery powered staplers, nailers and screw systems
(collectively “tools”) and collated staples, nails and screws
(collectively “fasteners”)
• Entrenched market position resulting from 50+ year operating
history and comprehensive product portfolio of highly-regarded
brands known for quality and reliability
• The Company sells its products through four primary
distribution channels – Pro Trades, Industrial, Retail and
International
• Realigned cost structure and additional opportunities to
strengthen EBITDA margins and position the Company to
capitalize on a rebound in the housing market and the broader
economy
• Long-standing brand names SENCO and TyRex are wellrecognized and highly regarded
Transaction
• Wynnchurch purchased SENCO’s assets in July 2009
Situation
• Burdened by heavy legacy costs related to the former parent,
the downturn in residential housing and general economic
conditions, Senco filed for Chapter 11 bankruptcy protection in
May 2009
• Wynnchurch selected as stalking horse bidder in a limited sale
process run by Company’s investment banker
• Established customer relationships and deep loyalty in key
distribution channels
• Augment management team and enhance resources in finance,
sales, marketing and new product development
• Accelerate top-line growth and enhance margins through rigorous
focus on capturing additional market share, new product
development, internal cost controls and metrics-driven
management
• Expand the Company’s presence in Europe and emerging markets
with an aggressive sales and marketing plan and heightened
brand awareness strategy
• Pursue add-on acquisitions extending the Company’s existing lines
of business or serving as entries into new market verticals
29
Case Study
Surepoint Technologies Group Inc.
Company
• Surepoint Technologies Group Inc. (“Surepoint”) is an industrial
instrumentation and electrical service company serving
Northwestern Alberta and Eastern British Columbia
• Provides value-added services and solutions to the oil and
natural gas industry
• Broad product and service capabilities include instrumentation
and electrical component construction and maintenance;
mechanical maintenance; parts supply, equipment rental and
on-site inventory management; and drilling rig electrical
controls construction, service and maintenance
Transaction
• Wynnchurch capital purchased a majority interest in March
2008
Situation
• Vertically-integrated business model with a comprehensive
service and product offering
• Favorable balance between new construction and recurring
maintenance projects
• Established relationships with major gas companies and a large
number of mid-sized independents
• Proven ability to attract and retain well-trained employees
• Positive end market dynamics / dramatic growth opportunity
• Pursue organic growth initiatives including continued expansion
of rig component division and new opportunities in contiguous
geographies
• Augment operational controls and implement productivity
enhancements to increase profitability
• Augment the management team and drive metrics-driven results
throughout the organization
• Surepoint shareholders sought a financial partner that could
help support future growth
• Non-auction situation
30
Case Study
United States Pipe and Foundry Company, LLC
Company
• United States Pipe and Foundry Company, LLC (“U.S. Pipe”) is a
leading manufacturer of a broad line of ductile iron pipe products,
fittings and joint restraints used in drinking water and wastewater
systems
• Maintained reputation as the leading brand and broadest product
line in the industry, despite poor industry conditions
Transaction
• Wynnchurch acquired U.S. Pipe in April 2012
• Positioned to benefit from strong growth as housing starts recover
and municipalities are forced to replace or upgrade water
infrastructure
• Significant capacity has been taken out of marketplace
Situation
• Strong CEO and management team in place to execute the strategic
plan and drive the turnaround
• Prior to the acquisition, U.S. Pipe was an underperforming division
of Mueller Water Products (NYSE: MWA)
• Due to the deep downturn in the U.S. housing market,
the overall recession, volatility in scrap steel prices,
industry shipment volumes and profits significantly
declined
• In May 2011, Mueller announced that it was exploring strategic
alternatives for U.S. Pipe
• Wynnchurch differentiated itself by:
• Engaging in direct dialogue with Mueller’s corporate
development team before a formal sale was launched
• Staffing the investment team with 7 investment
professionals including 3 senior professionals
• Sourcing an Operating Partner with 35-years of
experience in metals and deep turnarounds
• Improve quality control and lean manufacturing to recognize
significant operational improvement potential. A COO was retained
within 3-weeks of the acquisition
• Streamline management responsibilities and provide company with a
strategically-engaged board
• Refocus sales effort to maximize profitability through growing sales
in high contribution margin product lines
• Provided company with ample capital availability via over-equitized
balance sheet
customer base
U.S. Pipe Acquisitions
• U.S. Pipe acquired Griffin Pipe in January 2014
31
Case Study
Vista-Pro Automotive, LLC
Company
• Vista-Pro Automotive, LLC (“Vista-Pro”) is a leading designer,
manufacturer and distributor of non-discretionary aftermarket
automotive replacement parts including radiators, condensers
and heater cores
• Positive macro-economic trends for non-discretionary
replacement parts
Situation
• Wynnchurch formed Vista-Pro to acquire manufacturers of
non-discretionary aftermarket automotive replacement parts
• The first acquisition by Vista-Pro was Centrum Equities XV
("Centrum") which closed in July 2009. The second acquisition
was the purchase of select assets and operations of Proliance
International ,Inc. ("Proliance") through a bankruptcy sale
process
Transaction
• Vista-Pro was selected as the stalking horse bidder for the
Proliance assets in a limited sale process and the transaction
closed in August 2009. The two combined companies currently
operate as Vista-Pro Automotive
• Customer diversification across multiple channels
• Strong potential synergies from product and manufacturing
rationalization, SG&A and distribution costs
• Competitive advantage with low-cost, world class manufacturing
in North America
• Combined company with industry leading market position and
product offering in aftermarket heat transfer and temperature
control
• Reconstitute management team with industry veterans and a
clear vision to optimize the business
• Refocus sales strategy to maximize profitability through growing
sales with multi-step distributors and buying groups
• Targeting OE / OES opportunities
- Vista Pro executed acquisition of select assets of American
Condenser & Coil in June 2013
• Focus on maximizing fill rates and optimizing make vs. purchase
strategy
32
Case Study
Wolverine Advanced Materials, LLC
Company
• Wolverine Advanced Materials, LLC (“Wolverine”) is a leading
niche manufacturer of advanced rubber-coated materials for
the industrial, electronics and automotive markets
• Opportunity to leverage the Company’s market leading position
while continuing to drive operational improvement across its U.S.,
European and Asian operations
• Generated its leading market share in automotive brake noise
insulator and high performance gasket markets through
proprietary coating technology, superior service, technical
expertise and superior product quality
• Attractive competitive position
Transaction
• Strong cash flow generation
• Wynnchurch purchased the business in December 2010 in a
corporate carve-out from EaglePicher
• Actionable add-on acquisitions
• Long track record of high margins and strong cash flow
• Highly diversified business
• Pursue and execute on operational improvement initiatives
• Build on the Company’s revamped product development process
and continue to expand the Company’s portfolio of new products
• Capitalize on the improvement in the automotive industry over
the next several years as auto builds rebound from cyclical trough
• Expand presence in China and other emerging markets
• Continue Wolverine’s track record of market share gains,
particularly in underpenetrated product segments / regions
33
INQUIRIES SHOULD BE DIRECTED TO:
CHICAGO
CANADA
John Hatherly
Frank Hayes
Morty White
Managing Partner
Partner
Managing Director
(847) 604-6102
(847) 604-6107
(416)363-1423
[email protected]
[email protected]
[email protected]
DETROIT
Duncan Bourne
Michael Teplitsky
Terry Theodore
Managing Director
Vice President
Partner
(847) 604-6104
(847) 604-6120
(248)593-3801
[email protected]
[email protected]
[email protected]
WYNNCHURCH CAPITAL, LTD. I 6250 N. River Road, Suite 10-100, Rosemont, IL 60018
www.wynnchurch.com
T: 847 604-6100
F: 847 604-6105
E: [email protected]

Capital + Solutions for Complex Transactions

Transcription

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