American Capital was the lead agent and investor on a second lien financing to support the recent acquisition by TA Associates of Tectum Holdings, a manufacturer of pickup truck accessories, from Kinderhook Industries. American Capital also made an equity co-investment in the transaction.
“We’re excited to partner with TA Associates and increase our investment in Tectum under their new ownership,” said Dan Cohn-Sfetcu, Managing Director, Sponsor Finance. “Tectum is the clear market leader in its categories, with well-established strong brands, a diverse line of superior products, and strong relationships with major aftermarket retailers, distributors and OEMs.”
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. Tectum products are sold through independent retailers such as truck accessory stores, new and used vehicle dealerships and e-commerce websites. Tectum’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). The company 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).
American Capital first invested in Tectum in March 2014, providing $25 million in a second lien facility to support an add-on acquisition and dividend recapitalization of Tectum by its previous majority owner, Kinderhook Industries.
“We look forward to continuing to support Tectum as it grows through increased market penetration, new product introductions and expansion into favorable adjacent markets,” said Ryan Brauns, Managing Director and Head of Sponsor Finance. “Our Sponsor Finance Group is solely focused on supporting top tier private equity firms by committing up to $150 million in capital to strong middle market companies.”
American Capital (NASDAQ: ACAS) is a publicly traded private equity firm and asset manager that originates, underwrites and manages investments of $10 million to $750 million in lower and middle market private equity, leveraged finance, real estate, energy & infrastructure and structured products. From its eight offices in the US and Europe, American Capital and its affiliate, European Capital, will consider investment opportunities from $10 million to $750 million. American Capital was founded in 1986 and has $84 billion in total assets under management. The firm is headquartered in Bethesda (www.AmericanCapital.com).
“American Capital’s familiarity with Tectum, its commitment certainty, flexible financing package and ability to close on a tight timeframe made them the partner of choice in our acquisition. We are pleased to have their support to complete our investment in this dynamic company,” said Michael Berk, a Managing Director at TA Associates.
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).
2014 PEPD • Private Equity’s Leading News Magazine • 8-14-14