Milestone Partners has sold Precision Partners, an automotive tooling and parts supplier, to publicly-traded AK Steel at an enterprise value of $360 million.
Precision Partners is maker of automotive tooling and hot and cold stamped automotive parts – such as bumpers and step rails – that are sold to OEMs and Tier 1 customers. The company’s tooling capabilities include design, build, simulation and prototyping. Precision Partners, led by CEO Des Griffiths, was founded in 1955 and has more than 1,000 employees, including about 300 engineers and skilled tool makers. The company has eight plants in Ontario, Alabama and Kentucky and is headquartered in Windsor, ON (www.pphc.com) (www.electromac.com).
Milestone acquired Precision Partners in December 2013. Since its initial investment, Milestone supported the company’s management team in executing on a number of growth initiatives, including investments in capacity expansion in both Windsor, ON and Bowling Green, KY, and closing the August 2016 add-on acquisition of Windsor-based Fleetwood Metal Industries, a provider of metal stampings, assemblies and tooling to automotive OEMs and Tier 1 suppliers. As a result of these efforts, Precision Partners’ revenue and EBITDA increased at compound annual growth rates of 24% and 32%, respectively, over the course of Milestone’s ownership term.
The purchase price of $360 million paid by AK Steel is approximately seven times the estimated 2017 adjusted EBITDA of Precision Partners.
“It was a privilege to work with the Precision Partners management team over the past few years. After the initial carve-out transaction, we worked together to develop a plan to grow the business into a unique player in the North American market, and the team executed that plan,” said Milestone Partner David Proctor.
Milestone Partners invests from $5 million to $40 million in leveraged buyouts and recapitalizations of lower middle market businesses that have revenues of $15 million to $150 million, EBITDA of $3 million to $20 million, and valuations of $15 million to $150 million. The firm prefers niche-market leaders that provide high-margin products or services. Milestone Partners was founded in 1995 and is located in Radnor, PA (www.milestonepartners.com).
“Our investment in Precision Partners is illustrative of our investing approach at Milestone,” said Milestone Managing Partner John Shoemaker. “We collaborated with the management team to determine opportunities for investment and deployed capital and resources where appropriate in order to support the company and maximize returns for our limited partners and co-investors. We are particularly proud of the operating partners and advisors who worked closely with us through our ownership period and will continue to do so going forward.”
AK Steel (NYSE: AKS), the buyer of Precision Partners, is a producer of flat-rolled carbon, stainless and electrical steel products, and carbon and stainless tubular products, primarily for automotive, infrastructure and manufacturing, electrical power generation and distribution markets. The company operates eight steel plants, two coke plants and two tube manufacturing plants across six states (Indiana, Kentucky, Michigan, Ohio, Pennsylvania and West Virginia), one tube plant in Mexico, and is headquartered near Cincinnati in West Chester, OH (www.aksteel.com).
© 2017 Private Equity Professional | August 11, 2017
