TA Associates has completed a majority investment in Tectum Holdings (THI), a manufacturer of pickup truck accessories and a portfolio company of Kinderhook Industries. Kinderhook will maintain a significant minority interest in THI and will continue to participate on the company’s board of directors.
Tectum is a manufacturer of branded light duty truck tonneau covers, bedliners and accessories. Designed for security and cargo protection, the covers are available in a variety of soft and rigid materials such as vinyl, plastic and metal, and numerous styles, including retractable, folding, roll-up and snap-on units. The company also manufactures cushioned and carpeted protective liners for truck beds. THI products are sold through independent retailers such as truck accessory stores, new and used vehicle dealerships and e-commerce websites. THI’s brands include Extang (www.extang.com), Truxedo (www.truxedo.com), Undercover Advantage (www.undercoverinfo.com), Retrax (www.retrax.com), BedRug (www.bedrug.com) and BAK Industries (bakindustries.com). THI operates manufacturing facilities in California, Michigan, Missouri, North Dakota, South Dakota and Tennessee. The company is headquartered near Detroit in Ann Arbor, MI (www.thicorp.com).
“THI is a leading provider in the US tonneau cover market,” said Michael Berk, a Managing Director at TA Associates who will join THI’s Board of Directors. “The company has completed a number of strategic acquisitions over the past several years that have complemented its organic growth and helped solidify its market position. We are pleased to complete our investment in this dynamic company and will focus on helping THI continue and accelerate its strong financial performance.”
TA Associates makes buyouts and minority recapitalizations of profitable growth companies in the technology, financial services, business services, healthcare and consumer industries. Since founding in 1968, TA has invested in over 431 companies globally and has raised more than $18 billion in capital. The firm has offices in Boston, Menlo Park, London, Mumbai and Hong Kong (www.ta.com).
“We welcome TA Associates as an investor and THI Board member,” said Bill Reminder, CEO of THI. “With their impressive history of building additional value in successful businesses, TA is an ideal partner for THI. Our growth strategy will focus on product innovation and new product introductions, as well as possible additional product categories, and we will work closely with TA in these endeavors.”
Financing for this transaction was provided by the Senior Secured Loan Program which is jointly managed by Ares Capital Corporation and GE Capital. Robert W. Baird & Co. served as financial adviser to Kinderhook and THI.
“THI has been growing organically much faster than the overall market, with impressive profitability,” said Jeffrey Barber, a Managing Director at TA Associates who will also join THI’s Board of Directors. “Among the industry’s growth drivers are new truck sales and a high penetration rate of tonneau cover sales for new and used vehicles, driven in part by product innovation. We anticipate that THI’s addressable market will provide for steady growth in the years ahead.”
2014 PEPD • Private Equity’s Leading News Magazine • 7-29-14