Pfingsten Partners Acquires Four Wheel Drive Hardware
22 May 2000
Pfingsten Partners Acquires Four Wheel Drive Hardware, a Specialty Automotive Aftermarket Firm
DEERFIELD, Ill.--May 22, 2000--Internet Distribution Model
Pfingsten Partners, L.L.C., a Deerfield, IL-based private equity firm that acquires and develops Midwest-based middle market companies in partnership with management, today announced the acquisition of Four Wheel Drive Hardware, Inc., of Columbiana, Ohio. Four Wheel Drive is a mail-order and internet distributor of automotive aftermarket products for mini-sport utility vehicles, with the leading market share in parts and accessories for the CJ and Wrangler Jeep models.
Effective April 20, 2000, the acquisition is Pfingsten's first in the $8 billion mail-order automotive aftermarket industry and its first with an internet distribution component. Four Wheel Drive will continue to operate in its present location near Youngstown and retain its entire workforce of nearly 110 employees.
Pfingsten plans to build Four Wheel Drive into a larger specialty automotive aftermarket company through both internal growth and add-on acquisitions. Steps will include improving distribution capabilities to reach the entire U.S. within two-day shipping; expansion of the e-commerce segment of the company's business; and acquisition of direct competitors in the mini-sport utility arena as well as mail order firms in other enthusiast markets.
The expansion strategy is similar to that used by Pfingsten in other successful ventures in the distribution and publishing industries. In 1995, for example, Pfingsten acquired Barjan Products, Inc., a marketer and distributor of merchandise to travel centers and other non-truck stop channels. Since acquiring Barjan, Pfingsten has orchestrated 12 add-on acquisitions that have more than quadrupled Barjan's business. In the process, Barjan has become the leading manufacturer of CB antennas as well as the leading distributor of merchandise to car washes.
"Four Wheel Drive gives us a well-run company with a new market as well as the opportunity to enter the internet distribution arena for the first time," said Thomas S. Bagley, Senior Managing Director of Pfingsten Partners. "It has a number of operational and growth opportunities similar to other companies we have run, and we believe it is an ideal platform on which to build."
Four Wheel Drive markets its products directly to consumers through a 150-page color catalog produced twice annually and through its web site (www.4wd.com), which accepts online orders. The company offers same-day shipping on all in-stock products and employs customer service technicians that answer calls six days per week from its Columbiana headquarters and distribution facility.
The firm was founded in 1976 by the late Thomas Kennedy and was purchased from the surviving family members.
"This acquisition by Pfingsten Partners gives the Kennedy family a graceful exit strategy as well as a strong comfort factor," said Dallas Vernon, President of Four Wheel Drive, who will stay with the company during a transition period. "Pfingsten brings a solid track record in growing the companies it acquires and the capital resources to execute the plan, allowing the family to sell the company with the knowledge that the new owner will continue what they started."
Pfingsten Partners concentrates on acquiring mature middle market companies involved in manufacturing, light assembly, wholesale distribution, publishing and select service sectors. Investment returns are generated through long-term capital gains achieved through growth and operational improvements rather than through leverage or other types of financial engineering.