Saunders Karp & Megrue Applied Technology Partners Buys Michigan Rubber Products, Inc.; Buy and Build Venture Makes Second Acquisition
24 March 1998
Saunders Karp & Megrue Applied Technology Partners Buys Michigan Rubber Products, Inc.; Buy and Build Venture Makes Second Acquisition
NEW YORK, March 24 -- Saunders Karp & Megrue ("SKM")
announced today that SKM Applied Technology Partners ("ATP") has acquired
Michigan Rubber Products, Inc. ("MRP"), a manufacturer of rubber and plastic
products for the Big Three automakers and Tier 1 auto suppliers.
MRP is the second acquisition in ATP's buy and build initiative in the
specialty rubber and plastics industries. In January, ATP announced its
acquisition of Sussex Technology, Inc., a plastic injection-molding company.
Both acquisitions came as part of ATP's pursuit of strategic acquisitions of
rubber and plastics companies that target industrial and consumer end-use
markets. ATP's equity capital, combined with its debt financing
relationships, represent up to $500 million in total capital supporting this
investment strategy.
Based in Cadillac, Michigan, MRP has earned an excellent reputation among
the Big Three and Tier 1 auto suppliers for its complete design, development
and manufacturing services for rubber and plastic products. MRP is a
manufacturer of air induction systems, NVH (noise-dampening) products, static
gaskets, air, water and fuel tubes, and sealing systems. MRP has excellent
quality and delivery ratings, earning QS-9000 & ISO-9001 certification in
March 1996. Ford Motor Company recognized MRP as a "Full Service
Supplier" (FSS) in May 1997. These prestigious awards distinguish MRP from
the vast majority of automotive suppliers.
"There is a clear consolidation opportunity in the specialty rubber and
plastics industry segments, and Michigan Rubber gives our venture a strategic
platform in the automotive products segment -- where the consolidation dynamic
is especially acute," said John F. Megrue, General Partner of Saunders Karp &
Megrue. "MRP has an excellent reputation among the Big Three and Tier 1 auto
suppliers because of its unique engineering, design and product testing
capabilities. We believe that ATP is backing the right management team to
build a meaningful growth company in this segment."
Raymond B. Langton, President and Chief Executive Officer of SKM Applied
Technology Partners, also emphasized the growth opportunity at Michigan
Rubber. "The management team at MRP has built an impressive track record in
the automotive rubber and plastic products category. ATP's strategy is to
leverage off MRP's reputation with its customers and expand into related
rubber and plastics segments opportunistically." Mr. Langton has extensive
experience in the automotive and industrial markets, most recently as former
President and CEO of Chicago Rawhide Worldwide and, prior to that, President
and CEO of SKF USA, Inc.
"We are pleased to be working with SKM Applied Technology Partners," said
William D. Paul, Chairman of the Board of MRP. "With ATP's assistance going
forward, the company will be able to expand its capabilities and further
enhance services to its customers." After the transaction, Mr. Paul will
remain on the company's Board of Directors as Vice Chairman.
Dennis Brovont, President and Chief Executive Officer at MRP, emphasized
that MRP's management team will remain in place and that he foresees no
changes in day-to-day operations. Rather, Mr. Brovont stated that, "With
ATP's equity capital commitment, Michigan Rubber Products is entering an
exciting period of growth and expansion."
Mr. Brovont added that MRP plans to increase its capabilities, products
and market base through internal growth as well as acquisition. "We will
target companies that have developed rubber or plastic product specialties
that will complement our current product line and enable us to provide more
service and value to a broad customer base." He added, "We believe that MRP,
along with ATP, can continue the company's momentum and growth."
MRP produces over 500 products for approximately 100 customers, with air
induction systems representing its leading product line in Model Year 1998.
The company also manufactures other custom molded and extruded rubber and
plastic products for automotive and industrial applications. MRP's primary
manufacturing processes include rubber compression, transfer and injection
molding, as well as rubber extrusion and plastic injection molding.
Saunders Karp & Megrue is a merchant bank specializing in private equity
investments in the form of growth buy-outs, private company recapitalizations
and leveraged build-ups. SKM manages over $800 million of private equity for
itself and its institutional investors, which include major pension funds and
endowments. Collectively, the principals of SKM have over 50 years of private
equity investment experience and have made over 4O investments totaling in
excess of $10 billion. SKM's investments span a large number of industries,
including basic manufacturing, retailing, consumer products, health care,
financial services and transportation. Major portfolio companies include
Michel & Co. and Figi Graphics, Inc., two companies acquired in connection
with SKM's build-up in the giftware industry; Duro Industries, an independent
dye house for apparel fabrics; Hartford Computer Group, a value-added computer
reseller; California Cafe Restaurant Corporation; Dollar Tree Stores, Inc.
; Hibbett Sporting Goods ; and Targus Group
International, Inc., the world's leading designer and marketer of computer
luggage. Founded in 1990, the firm has offices in New York City and
Greenwich, Conn.
More information about SKM is available on the Internet at:
http://www.mediasource.com/skm_index.html.
SOURCE Saunders Karp & Megrue