M&A Deals of the Week

With deal news from Milwaukee Gear Co., Mayville Engineering Co., Commercial Communications Inc., and Trico Corp.

New York investors acquire Milwaukee Gear Co.
Milwaukee Gear Co. and its sister company, Treat All Metals, have been acquired by High Road Capital Partners, a New York-based private equity firm. Milwaukee Gear is a manufacturer of custom precision spur and helical gears utilized in a number of markets, including energy, compressors, mining and other general industrial applications. Treat All Metals is the heat-treating arm of Milwaukee Gear and offers a line of heat treating services to Milwaukee Gear as well as outside customers.

Rick Fullington, president and chief executive officer of Milwaukee Gear, said he is "excited about the company’s future and the capital and operating support High Road and its equity partner, Charter Oak Equity, will bring to the company."

Robert Fitzsimmons, High Road’s managing partner, told SBT that the Milwaukee companies’ management teams, employees and names will be retained. However, Milwaukee Gear’s former chief executive officer, Harold Trusky, plans to retire.  "Milwaukee Gear (and Treat All Metals) have a lot of great opportunities in the markets they’re already in," Fitzsimmons said. "We’d like to find ways to increase their capacity and we will look for add-on acquisitions that make strategic sense."

Both Milwaukee companies are poised for growth, according to John Emory Jr., president and chief executive officer of Emory & Co., a Milwaukee-based investment banking firm that advised the Milwaukee firms on the transaction. Debt financing for the transaction was provided by Babson Capital Management LLC and JP Morgan Chase. Financial terms of the transaction were not disclosed.

Mayville Engineering Company acquires start-up manufacturer
Mayville Engineering Company (MEC), a contract manufacturer based in Mayville, Wis., recently acquired Fabricating Specialists LLC, a startup manufacturer of formed tubes and form tube assemblies. Terms of the acquisition were not disclosed.

Fabricating Specialists will open a 54,000 square foot facility in Neillsville, in western Wisconsin, by the end of August, said Robert Kamphuis, chairman, president and CEO of MEC. When it begins operations, Fabricating Specialists will have 10 to 30 employees. "We expect, in the next three years, to have close to 100 employees," Kamphuis said.

Jim Grunewald and Steve Donovan, founders of Fabricating Specialists, have become MEC employees. Kamphuis met the pair when they were seeking to lease space for their startup company. "We fabricated about $100 million worth of parts in Wisconsin and the Midwest last year," he said. "Their company is going to do some unique stuff that is right up our alley. Their business model is ready to take off."

MEC is 91 percent owned by its employee stock ownership program (ESOP), Kamphuis said. Both Grunewald and Donovan have become part of the ESOP, he said. Being part of the larger company will help the startup company to grow quickly, Grunewald said.

"Being part of the MEC family of companies gives a tremendous foundation and unlimited potential," he said. "MEC’s financial strength, business support systems and breadth of capabilities coupled with its unparalleled commitment to zero defect quality and outstanding customer satisfaction creates tremendous opportunities in the marketplace."

Private equity firm buys Hartland printing company
Commercial Communications Inc., a Hartland-based digital document management and commercial printer, was recently acquired by TouchPoint Print Solutions Corp., a printing company acquisition platform sponsored by Huron Capital Partners, a Detroit private equity firm. Financial terms of the acquisition were not disclosed. Huron has completed four transactions since forming TouchPoint in July, 2007, and expects more than $100 million revenue. Its portfolio includes Milwaukee-based CoakleyTech LLC, a document process outsourcing firm. Milwaukee-based Emory & Co. was a financial advisor in the transaction.

Trico Corp. acquires Ohio company
Pewaukee-based Trico Corp. has acquired Predict USA, of Cleveland, Ohio. The acquisition enables Trico to bring oil analysis and monitoring services in house. Trico can now offer a one-stop shop for all predictive lubrication management services to its clients.

"Predict is a well-respected company and brand," said Trico chief executive officer Robert Jung. "Bringing our two organizations together creates a true total solutions package for manufacturers looking to enhance the life of their equipment and improve overall operations." Financial terms of the acquisition were not disclosed.

Predict will become a wholly-owned subsidiary of Trico, but will continue to operate under its own brand name, according to Trico president Nick Kroll. Predict’s lab operations in Cleveland will continue, but its administrative and accounting functions will move to Trico’s Pewaukee headquarters. Trico believes it will hire four to five new employees to handle those functions, Kroll said.

The law office of Davidson & Kuelthau, S.C., and the accounting firm Virchow Krause & Co. advised Trico in the acquisition, Kroll said.

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