Copperweld Group, a portfolio company of Kinderhook Industries, has acquired Seminole Wire & Cable. Kinderhook acquired Copperweld in October 2019 from THL Credit.
Seminole is a manufacturer of plastic-extruded wire products used in a variety of end markets and applications including blasting and connecting wire for mining, buried wire for pet containment, and AV wire for broadcasting.
The company was founded in 1962 by James McGrath and is headquartered near Philadelphia in Pennsauken, New Jersey.
Copperweld is the world’s largest manufacturer of bimetallic conductors and is the only domestic producer of copper-clad steel (CCS) and copper-clad aluminum (CCA) wire. The company’s products have greater durability, are lower weight, and have cost advantages over traditional copper wiring products.
Historically a supplier of bimetallic wire to the telecommunications industry, Copperweld has expanded into new markets in recent years, supplying CCS and CCA wire to the automotive, power grid, building wire and specialty wire sectors. In particular, the electrification of vehicles is expected to rapidly grow the copper content in vehicles, causing OEM’s to search for lighter and cheaper materials, a trend Copperweld expects to benefit from. Copperweld’s revenues in 2018 were $92 million with a gross profit of $14 million and EBITDA of just under $9 million. The company, led by CEO Craig York, was founded in 1915 and is headquartered south of Nashville in Fayetteville, Tennessee.
“Partnering with Seminole will allow Copperweld to have more direct relationships and interaction with end-users, ultimately allowing us to better serve our customers,” said Mr. York. “Furthermore, Copperweld will be able to offer bimetallic solutions to many Seminole customers currently using alternative products, as Copperweld bimetallics can offer better form, fit and function.”
The acquisition of Seminole brings wire extrusion and other manufacturing capabilities in-house for Copperweld and bolsters the company’s wire finishing processes including cabling, braiding and assembly. “We are excited to combine the Copperweld and Seminole teams and begin collaboration on new innovative solutions,” said Nate Druckenmiller, a vice president at Kinderhook. “These businesses fit well together and expand the total addressable market for Copperweld’s products.”
“This strategic transaction provides upstream manufacturing capabilities that will support Copperweld production across multiple product lines as the business continues to grow,” said Paul Cifelli, a managing director at Kinderhook. “We look forward to seeing Copperweld leverage Seminole’s expertise in these production areas.”
New York City-based 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. Sectors of interest include healthcare services; environmental and business services; and automotive and light manufacturing.
In January 2020, Kinderhook held a final closing of its sixth fund, Kinderhook Capital Fund VI LP (along with a parallel fund), at its hard cap with $1 billion of limited partner commitments. Fund VI was oversubscribed and is the largest fund ever raised by Kinderhook.
Private Equity Professional | June 2, 2020