Motor City Industrial, a portfolio company of Kian Capital and Oakland Standard, has been sold to AFC Industries, a portfolio company of Bertram Capital.
AFC distributes fasteners and other class C-parts – cable ties, fittings, springs, gaskets, hinges, keys, and latches – that are used by OEMs in their assembly operations. C-parts typically include low-priced and bulk-handled materials, which have high procurement costs compared to value.
AFC also provides supply chain management services, vendor-managed inventory programs, and other services including kitting, packaging, and assembly. Many of AFC’s customers are active in the general industrial, medical, electric utility, flow control, and scientific instrument sectors. AFC, led by CEO Kevin Godin is headquartered north of Cincinnati in Fairfield, Ohio.
Bertram Capital acquired AFC in April 2021 from Incline Equity Partners. In turn, Incline acquired AFC in March 2015 from Rockwood Equity Partners. Incline completed 12 add-on acquisitions during its ownership term.
Motor City Industrial is a wholesale distributor of industrial fasteners, fittings, abrasives, tools, personal protective equipment and related items. The company also provides value-added vendor-managed inventory and kitting services. Motor City is based in the Detroit suburb of Hazel Park.
Kian Capital and Oakland Standard acquired family-owned Motor City in July 2015 and more than doubled the company’s EBITDA during its nearly seven-year ownership term. The two firms helped Motor City add several key managers to its executive team – CEO Joe Stephens, CFO Tim Hopman, and CRO Jason Brown (CRO) – and acquire three add-ons with the buys of EMCO, a North Carolina-based distributor of electrical, mechanical, fluid power and automation products (May 2017); Quality Fastener and Supply, a Michigan-based distributor of industrial consumables (May 2019); and Smith Fastener, a West Virginia-based distributor of industrial consumables and ancillary products (January 2019).
“Kian and Oakland Standard were true partners, providing critical guidance as we navigated meaningful growth and a challenging operating environment brought on by COVID,” said Mr. Stephens. “They showed unwavering support for our company and people, investing the capital and time needed to maximize Motor City’s potential, seize opportunities and fortify the business. This support, combined with the team’s hard work, led to a successful outcome for the company’s stakeholders and a new partnership with AFC that I am confident will bring even more value to our customers.”
“We are passionate about helping companies create sustainable, long-term success and drive to persevere despite the inevitable challenges that come along the way,” said Rick Cravey, a co-founder and partner at Kian. “The Motor City of today is the result of a significant team effort showcasing the true meaning of genuine partnership. We want to thank all our partners in the deal, particularly Joe Stephens and the rest of the management team, who helped transform the company into the professionalized business it has become. We are proud of the milestones we achieved together and wish them all continued success as they begin the next chapter with AFC.”
“We have been proud to partner with Motor City’s team to help drive growth and position the company for long-term success,” said Bryan Tolles, the founder and managing partner of Oakland Standard. “AFC’s purchase of Motor City is the culmination of years of hard work by the entire team and a testament to the caliber of business we have all created. We are excited to see what AFC and Motor City will accomplish together.”
Charlotte and Atlanta-based Kian makes both control and minority investments of $7 million to $30 million of equity and subordinated debt in companies that have revenues of $10 million to $100 million and EBITDA of $2 million to $15 million. Sectors of interest include consumer, services, specialty manufacturing, and value-added distribution.
Oakland Standard invests in US and Canada-based companies that have less than $10 million of EBITDA. Sectors of interest include niche manufacturers, value-added distributors, general industrial and automotive, and building products. The firm is based in the Detroit suburb of Birmingham.
TM Capital was the financial advisor to Motor City on this transaction.
© 2023 Private Equity Professional | January 26, 2023
