MW Industries, Inc.
Many people might say that manufacturing businesses are boring, but to us, industrial companies with a leading market position, highly diversified end markets and customers, experienced management team, strong cash flow characteristics and the ability to weather a downturn in the economy are very exciting and a formula for a solid return. This was true of our acquisition of MW Industries.
MW Industries is a leading provider of highly engineered springs, fasteners and other precision components, and typically holds the #1 or #2 positions in its target markets where quality, speed to market and value-added capabilities are critical to a customer’s purchasing decision. Throughout our five-year investment period, we worked closely with the company and its management team, led by industry legend Dan Sebastian, to strengthen and streamline the organization. A national sales force was established to replace the former divisional sales approach and drive cross-selling initiatives across the company’s 13 facilities throughout the United States. Additionally, MW Industries’ multiple financial reporting systems were integrated across the divisions, and the corporate and legal structure was simplified. Over this same period, we acquired and fully integrated two complementary add-on acquisitions into the core business. All these activities, both internal and external, helped to create a more dynamic, cohesive and unified company.
The investment was not without its challenges given the “great recession” that occurred during our investment period. However, due to the diversification of its products, end markets and customers as well as deliberate actions taken by the management team with our support, MW Industries navigated the treacherous waters of the recession, enhancing its customer relationships, capturing additional market share and reducing its cost structure. Following the economic downturn, sales rebounded strongly and growth in EBITDA was even more significant as the company leveraged its substantial operational improvements to expand margins.
Following further strong growth, we worked with MW Industries to develop a robust, highly strategic acquisition pipeline for the next buyer of the business. After springing back and reaching new heights – and with a lot of runway still ahead for the business – the company was sold to Genstar Capital, a private equity firm based in San Francisco.Print