Wing Capital Group, a Milwaukee-based private equity investment group, has made its second portfolio acquisition with the purchase of Oshkosh-based Muza Metal Products.
Muza Metal is a full-service metal fabrication company that serves original equipment manufacturers (OEMs) in the military and defense, variable drive, industrial equipment, medical, power generation and renewable energy markets. The company was previously owned by Tom Muza, who was the third generation of his family to own and operate it.
Muza Metal, which has about 240 employees and a total of 180,000 square feet of manufacturing space in Oshkosh, experienced steady growth through the Great Recession. Like many in the manufacturing space, Muza had significant growth last year – more than 30 percent over its 2009 sales.
“There was some nice growth from our existing customer base. Our top 10 customers across the board are seeing growth in their businesses,” said Dan Hietpas, president of Muza Metal. “We’re attracting new customers, and we’ve taken some work away from our competition by delivering more cost effective and better cost solutions.”
Wing Capital is a small private equity group made up of managing director and founding partner Jeff Beischel; managing director Gerry Schwartz; partner Ralf Böer, who is the chairman, CEO and partner at Foley & Lardner LLP; partner Dave Drury, president and CEO of Poblocki Sign Co., and partner Peter Sommerhauser, a senior partner with Godfrey & Kahn S.C.
Wing Capital also owns Kickhaefer Manufacturing Company (KMC), a metal fabricating business in Port Washington.
Muza Metal’s growth and its reputation in the manufacturing community attracted Wing Capital to it, said members of the group.
“Our model is to assist companies, particularly family-owned businesses ,” Beischel said. “Our objectives at Wing are about more than capital. We like to mentor (the leadership) group and go through the growth curve of growing the business.”
Beischel is now spending several days each week in Oshkosh, working with Hietpas, his management team and suppliers.
“Our role (Wing Capital) and my role as a mentor/coach is to guide Dan through the leadership transitioning,” Beischel said. “Initially, I’ll be spending more time there, but as we develop our relationship, I’ll be there less.”
Wing Capital’s mentoring model and its focus on growing Muza Metal’s sales and production capabilities made it an acquirer of choice, Hietpas said.
“We talked to many different groups and it became evident that Wing was the one we wanted to partner with,” he said. “We liked their approach and what they said about maintaining the integrity of the business. We felt they would be a good partner to recapitalize the business and continue to grow it.”
The funds that Wing Capital has invested in its two portfolio businesses are all private dollars. It has not accepted any institutional capital. Typical private equity funds, most of which have accepted institutional dollars, hold their portfolio companies in a five to eight year window.
Because it is only using private dollars, Wing Capital is able to take a longer horizon on its investments, Beischel said.
“Our responsibility to our investor group is (to generate) a rate of return,” he said. “Because we have no institutional investors, it gives us flexibility. We’d rather invest for the long term and do the right thing (for these companies).”
Wing Capital is interested in acquiring additional manufacturing companies in Wisconsin, and is in active discussions with potential acquisitions.
“The strategy is to build out related manufacturing companies with synergies with groups and markets,” Beischel said. “We’re very bullish on manufacturing in the state now, especially those that serve large OEMs. We’re looking for companies on the rise with great leadership, particularly family businesses that are in transition.”
