MPE Acquires Specialty Plastics Maker

MPE Partners has acquired Teel Plastics, a maker of specialty plastic products from a wide range of commodity and specialty plastic resins.

Specializing in plastic extrusion and injection molding, Teel Plastics is a manufacturer of complex plastic components used in the agriscience, laboratory, medical, cosmetics, water treatment, and industrial piping markets. The company has a 150,000 square foot manufacturing facility and headquarters in Baraboo, Wisconsin.

Teel has capabilities in a variety of plastic resins from commodity high-density polyethylene (HDPE) to polyether ether ketone (PEEK), which is used in medical applications because of its tolerance to gamma radiation exposure and autoclaving sterilization, and polyphenylene sulfide (PPS), a heat resistant thermoplastic polymer.

“Since its founding in 1951, Teel has developed a reputation for superior quality, materials expertise, collaborative product development, and exceptional customer service,” said Matt Yohe, a partner at MPE.

Teel Plastics was founded in 1951 as Insemikit Co., a maker of veterinary products used in the livestock artificial insemination sector and was renamed Teel Plastics in 1958. In 1999, Jay Smith and his two children, Jason Smith and Brynna London, acquired the company. In 2016, Teel Plastics was named Wisconsin Manufacturer of the Year for its performance during 2015.

To acquire Teel, MPE partnered with Jay Smith, as well as members of its senior management team, led by President Tom Thompson. “The Smith family is proud of the success we’ve had building Teel into a world-class plastics processor over the past two decades, and we have a future of exciting growth planned,” said Mr. Smith. “We are confident that, together with MPE, we will continue to innovate, deliver quality products to our customers, and execute on our growth plan. We are excited to utilize the capabilities, resources, and capital that MPE brings to support this next chapter of growth.”

“We look forward to partnering with the management team to help Teel accelerate its growth as a platform company while maintaining the culture and tradition of excellence that has made Teel so successful to date,” said Karen Tuleta, a partner at MPE.

MPE invests in lower middle-market companies that are valued from $25 million to $150 million and have EBITDAs between $5 million and $20 million. Sectors of interest include high-value manufacturing and commercial & industrial services. The firm has offices in Cleveland and Boston.

Twin Brook Capital Partners, the middle-market direct lending arm of Angelo Gordon, served as administrative agent on debt financing to support the buy of Teel by MPE. Chicago-based Twin Brook focuses on loans to private equity-owned companies with EBITDA between $3 million and $50 million, with an emphasis on companies with $25 million of EBITDA and below. The firm targets senior financing opportunities up to $200 million, with hold sizes across the platform ranging from $25 million up to $150 million. Twin Brook’s products include opportunistic investments in second lien, mezzanine, and equity co-investments.

P&M Corporate Finance was the investment banking advisor to Teel on this transaction.

© 2020 Private Equity Professional | February 6, 2020

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