As part of its latest auto-aftermarket build-up, Kinderhook Industries has formed Race Winning Brands (RWB) and acquired Performance Motorsports International from publicly-traded Dover Corporation for total consideration of $150 million. As part of the transaction, Dover will have a minority ownership stake in RWB.
Performance Motorsports International (PMI) is a manufacturer of performance and racing pistons as well as connecting rods, crankshafts, electronics, and other engine related components. The company sells its products to the automotive and powersports performance markets under several brands including JE Pistons, Wiseco Performance Products, K1 Technologies, Innovate Motorsports, and ProX Racing Parts. Customers include professional and sportsman racers, engine builders, enthusiasts, street performance racers, OEM crate engine builders, and automotive and powersports wholesale distributors. The company is headquartered east of Cleveland in Mentor, OH (www.pmi-brands.com); (www.wiseco.com); (www.jepistons.com); (www.pro-x.com); (www.k1technologies.com); and (www.innovatemotorsports.com).
Brian Reese, a Kinderhook Operating Partner, former Vice President of COMP Performance Group and most recently a Divisional Vice President of Sears Holdings Corporation, will join Race Winning Brands as its Chief Executive Officer. “I have long admired PMI and considered their brands as preeminent leaders in the automotive and powersports performance markets. I am thrilled to have the opportunity to work with Kinderhook and the management team to lead Race Winning Brands in its next phase of growth.” said Mr. Reese.
“A fundamental tenet of Kinderhook’s investment philosophy is identifying unique investment opportunities where our experience, abilities and network of Operating Partners can help create value,” said Paul Cifelli, a Managing Director at Kinderhook. “Race Winning Brands aligns perfectly with this investment philosophy. We are confident that Kinderhook’s proven ‘buy-and-build’ strategy will allow us to expand RWB’s leadership position in the automotive and powersports performance markets.”
The buy of Performance Motorsports International is Kinderhook’s 40th automotive aftermarket acquisition since inception and the third public/private equity partnership completed in the past 24 months.
Kinderhook makes control investments in companies with transaction values of $25 million to $150 million in which the firm can achieve financial, operational and growth improvements. The firm makes investments in non-core divisions of public companies, management buyouts of entrepreneurial-owned businesses, troubled situations, and existing small capitalization companies lacking institutional support. Kinderhook was founded in 2003 and is based in New York (www.kinderhook.com).
Financing for the transaction was provided by a debt syndicate led by Antares Capital, Varagon Capital Partners, Madison Capital, and NewStar Financial. “Antares understands our investment thesis and financing needs given their experience supporting us on prior automotive aftermarket deals,” said Mr. Cifelli. “As in prior transactions, the Antares team was reliable and flexible throughout the process.”
Dover (NYSE:DOV), the seller of PMI, is a diversified global manufacturer with operations in energy, engineered systems, fluids, and refrigeration & food equipment. The company has annual revenue exceeding $7 billion and employs more than 29,000. Dover is headquartered in the Chicago suburb of Downers Grove (www.dovercorporation.com).
© 2017 Private Equity Professional | February 15, 2017
