Monomoy Capital Partners has completed the merger of two of its portfolio companies – Escort Inc. and Cobra Electronics Corp. – to form Cedar Electronics Holdings Corp. The merger allowed for a dividend payment to be made to Monomoy Capital Partners II, LP and other investors.
The combination of Escort and Cobra creates a sizable branded consumer electronics company whose products are used by casual and professional drivers, boat owners and outdoor enthusiasts. Cedar will continue to market its products under the Cobra, Escort, Passport and Beltronics brands and will focus on six core product categories: radar detection (Cedar is the industry leader in the radar detection market at every price point and in every sales channel); citizen band radios; marine radios; and two-way radios dash cams.
“Cedar brings together three leading American brands to create a diversified, highly-profitable consumer electronics platform with a dedicated customer base in cars, trucks, boats and hiking trails across North America,” said Justin Hillenbrand, a partner and Co-Chief Executive Officer of Monomoy.
This transaction was financed with a senior credit facility provided by Philadelphia-based LBC Credit Partners (www.lbccredit.com) and a mezzanine loan provided by Charlotte-based Capitala Investment Advisors (www.capitalagroup.com). With the closing of the merger, Cedar paid a $41 million dividend to its shareholders while maintaining, according to Monomoy, a conservative capital structure and modest leverage.
Escort is a market leader in the design, manufacturing and distribution of radar detectors for both professional and amateur drivers. Escort sells radar detectors under the Escort, Passport and Beltronics brands through the Escort and Beltronics websites, Amazon, Best Buy and specialty retailers. Monomoy acquired Escort through its second fund in October of 2013 from a group of investors led by Falconhead Capital. Since acquisition, Escort has upgraded its senior management team, restructured operations, and re-focused the company on its core products and customer base. Escort is headquartered near Cincinnati in West Chester, OH (www.escortradar.com).
Cobra designs, sources and distributes marine radios, two-way radios, citizen band radios, dash cams, radar detectors and other consumer electronics. The company’s products are sold under the Cobra brand name through big box retailers, truck stops and travel centers, e-retailers and specialty retailers. Monomoy 
acquired Cobra through its second fund in October of 2014 in a take private transaction. Since acquisition, Cobra has improved profitability by streamlining product development, rebuilding its supply chain and distribution system, and improving product quality and customer satisfaction. Cobra is headquartered in Chicago (www.cobra.com).
The combined businesses – under the Cedar Electronics umbrella – are now based at Escort’s headquarters in West Chester and have approximately 350 employees. David Thornhill, formerly the senior executive of Escort, is now the Chief Executive Officer of Cedar. Sally Washlow, formerly the senior executive of Cobra, is now the President of Cedar.
“The Monomoy team has been the perfect partner for both Escort and Cobra,” said Mr. Thornhill. “Through strategic guidance and operational discipline, the Monomoy team has helped management transform both brands into profitable, thriving businesses over a period of months. As a healthy middle market company, Cedar is now positioned for strong growth among its enthusiast consumer base both organically and through future acquisitions. We are excited about the future.”
Monomoy Capital Partners makes control investments in middle market businesses with $50 million to $500 million in annual sales. Sectors of interest include manufacturing, distribution, consumer product and foodservice industries. The firm has $700 million in assets under management and is headquartered in New York (www.mcpfunds.com).
This transaction marks the twelfth liquidity event for Monomoy Capital Partners II, LP, a 2011 vintage private equity fund.
Houlihan Lokey (www.hl.com) acted as the financial advisor to Cedar in the transaction.
2015 PEPD • Private Equity’s Leading News Magazine • 6-29-15
