Midwest Automotive Designs, a portfolio company of Merion Investment Partners, Petra Capital Partners and Pegasus Capital Group, has been sold to publicly-traded REV Group (NYSE: REVG). Midwest Automotive Designs specializes in second stage value-added assembly, or “up-fitting,” of luxury vans, trucks and RVs.
Midwest Automotive Designs custom-builds RV’s (recreational vehicles) and LCT bus (limousine, charter and tours) on the Mercedes-Benz Sprinter chassis and the newly introduced Dodge ProMaster chassis. The company sells its products through an independent dealer network. Since its inception in 2003, the company has grown to over 130 employees with combined manufacturing and office space of over 100,000 square feet and annual revenue of approximately $45 million. The company is headquartered in Elkhart, IN (www.midwestautomotivedesigns.com).
“One of our key strengths is our ability to rapidly design, engineer, and commercialize new products,” said Tim Gray, President of Midwest Automotive Designs. “Our combination with REV makes all of the sense in the world. We are excited to tap into REV’s technical resources and nationwide dealership footprint.”
REV Group (formerly Allied Specialty Vehicles) was formed in 2010 by American Industrial Partners merging of four of its portfolio companies: Collins Industries (buses and ambulances), E-One (firetrucks), Halcore Group (emergency and rescue vehicles), and Fleetwood Enterprises (RVs). Numerous add-on acquisitions have been completed under AIP’s ownership and today the company has annual revenue of over $2 billion. The company went public in late 2016 under the symbol REVG (NYSE) and is headquartered in Milwaukee (www.revgroup.com).
The acquisition of Midwest Automotive Designs enhances REV’s product offerings in both its Recreation and Commercial segments through the RV and bus divisions, by adding a selection of Class B RVs and multiple products for the LCT bus markets, respectively. “The addition of top quality custom shuttle buses, limousines and executive transportation vehicles is complementary to our existing commercial vehicle line of products,” said John Walsh, President of REV’s bus division. “All of these products add to an already solid line of luxury vehicles under our Krystal and Federal brands.”
Merion, Petra and Pegasus acquired Midwest Automotive Designs in September 2014. During the investment period, the company grew revenues and EBITDA at a CAGR of 32% and 24% respectively.
Merion Investment Partners is a licensed SBIC and a provider of $4 million to $20 million of mezzanine and equity capital to lower middle market companies that have revenues greater than $10 million and EBITDA greater than $2 million. Sectors of interest include business services, specialty manufacturing, healthcare, profitable technology companies with proven products and markets, and e-commerce. The firm was founded in 2003 and is based near Philadelphia in Wayne, PA (www.merionpartners.com).
Petra Capital Partners provides subordinated debt and preferred stock to companies for expansion, acquisition, buyout, refinancing or recapitalization. The firm invests up to $20 million in companies that have a minimum of $10 million in revenue and positive EBITDA. Sectors of interest include business services, healthcare and information technology services companies. The firm is based in Nashville (www.petracapital.com).
Pegasus Capital Group invests in private companies and corporate divestitures located across North America that have $2 million to $15 million of operating cash flow and EBITDA margins greater than 10%. Sectors of interest include industrials, chemicals, packaging, agricultural products, and aerospace & defense. The firm is based in Santa Monica, CA (www.pegasusmgmt.com).
© 2017 Private Equity Professional | April 24, 2017
