TCI, with new PE-backed owners, prepares for next step

TCI, a manufacturer of filters and other protectors for electric drives, has been purchased by management and a private equity firm, who plan to grow its employment, range of products and markets the products are sold to.

Trans-Coil Inc. (TCI), a Milwaukee-based manufacturer of filters and other protectors for electric drives, has been purchased by three of the company’s senior managers and a private equity partner. Steve Copp, president and chief operating officer, Al DiPierno, vice president of sales and marketing, and Dean Mehlberg, an engineer, bought TCI recently from Kerry Shoemaker, the company’s former CEO who had owned it since the early 1970s. Terms of the acquisition were not disclosed.

TCI is based at 7878 N. 86th St., on Milwaukee’s far northwest side. Copp, DiPierno and Mehlberg were joined in the purchase by Indianapolis-based Center Field Capital, a private equity firm. TCI retained the Milwaukee investment banking firm Cleary Gull Inc. to help it find a financial partner, and Cleary Gull helped the company connect with Center Field.

The Indianapolis private equity firm has been the right economic partner because it has the same ideas about growing TCI for the future as the three managers, Copp said. "We were looking for someone who would be involved, but not intrusive, who could provide an external viewpoint and guidance," Copp said. "And someone who wanted to make a continuing investment in R&D."

TCI has averaged 18 percent revenue growth over the last six years, Copp said, and the company expects even more aggressive growth in the near future. To fund that growth, the company needs access to capital, and partnering with a private equity group gives the company access to the kind of money it needs.

"To grow at that rate and with the expectations to accelerate the growth, we need access to capital," Copp said. "We will be making investments in the business, both in capital improvements and R&D." Over the next year, TCI will install a new IT system to support an E-commerce site, a more robust computer system and new web site, DiPierno said. The company will also continue upgrading its existing products and create new product lines.

"We’re getting into new markets like alternate energy generation – wind and solar – some of our customers are taking us into those markets," DiPierno said. "And we do business with all of the (electric) drive manufacturers here, and their international presences will help us expand internationally."

Since the purchase closed, TCI has been working to rebrand itself as Trans-Coil International, which better reflects the growth and new products the company will perform in the future, Copp said.

TCI has about 100 employees now. The company has grown its employment by 50 percent over the last five years, and recently added a third shift. Because of its new owners and the continuing demand for its products, the company expects a significant employee increase over the next 12 months.

"We’re expecting to add 15 to 20 percent to our work force between now and the end of 2009," Copp said. "Right now, we’re looking for production workers, we have engineering positions and marketing positions."

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