CASE STUDY

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Provider of paint line coating removal services

Buyout | July, 2006
Exit | October, 2014

Background  

Founded in Chilton, WI in 1983, American Finishing Resources (“AFR”) provides paint and powder coating removal services as well as fixture fabrication to a broad array of Midwest based manufacturers. By 2006, the two founding owner-manager siblings were seeking liquidity on their AFR ownership as a means to address strategic differences. AFR characteristics included: (i) high market share in an environmentally sensitive niche industry segment; (ii) strong recurring revenues with route based operation; (iii) flat to declining revenue trends; (iv) idled five year old Shelbyville, IN plant; (v) scaled back management team; and (vi) several identified acquisition opportunities.

Transaction & Post Closing 

In July 2006, Bel Air principals were part of a private equity team that sponsored the buyout of AFR in an all cash transaction that provided liquidity to ownership and investment opportunities for management. Post-closing accomplishments included: (i) recruiting a strong CEO who also purchased equity; (ii) reopened the idled Indiana facility; (iii) acquired a small competitor; (iv) developed an interchangeable material handling cart which solved a problem of limited use carts in manufacturing settings; (v) expanded employment and revitalized sales efforts; and (vi) significantly expanded the customer base and rebuilt reputation with former customers. After an 8 year ownership and having achieved the initial strategic goals, ownership exited AFR through a sale to DuBois Chemicals in October 2014. The transaction provided significant liquidity to management and ongoing managerial roles.

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