Financial Advisor: N. M. Rothschild & Sons Ltd.
Legal Advisor: Kirkland and Ellis LLP
In a textbook move from its growth capital playbook, London-based buyout shop
The buyout shop generally invests between $20 and $200 million at a time, and 3i Partner Ken Hanau said the Mold-Masters infusion was on the “higher end” of that range. Mold-Masters generates annual revenue of between $195 million and $260 million, based on Hanau’s estimate that the company has about 15 to 20 percent of the $1.3 billion market for hot runner systems, which convey molten plastic into molds. The company may make add-on acquisitions.
Hanau said that “going forward we own roughly 50 percent” of the company. That’s consistent with reports in Toronto’s The Globe and Mail newspaper that 3i bought a 49 percent stake in the Georgetown, Ontario-based company. In addition to its ownership stake, 3i gets several seats on the company’s board. It also is installing as chairman Hamdi Conger, an industrial executive who has managed four other 3i portfolio companies, including Hyva, NORMA Group and AES Seal.
Conger’s management experience in Europe and Asia appealed to Mold-Masters CEO Jonathon Fischer, who wants to further expand its international operations, Hanau said. 3i also plans to tap its network of international executives to create advisory boards to help Mold-Masters expand in Europe and Asia, Hanua said. The company, which already generates 60 percent of its revenue outside of North America, has offices in India, China, Brazil, Japan and the United States, as well as a large manufacturing plant in Germany.
Fischer is the son-in-law of Jobst Gellert, who with his brother Waltraud Gellert founded Mold-Masters in 1963. Jobst Gellert began working with plastics in the 1950s and built a career as an innovator, securing some 1,600 patents in hot runner technology since Mold-Masters’s founding.
The family tapped PriceWaterhouseCoopers in Toronto to help them find a suitable partner for the expansion.
The Mold-Masters investment is exactly the kind of play 3i wants to continue making in North America, Hanau said. With offices in 14 countries, 3i specializes in paving the way for its portfolio companies to expand internationally. “In the last 18 months we’ve helped more than 20 portfolio companies set up operations in China,” he said.
This is the second deal led by 3i’s New York office, which opened a little over a year ago. Its first was a $57 million investment in Fulcrum Limited, a business-services company that serves hedge funds.—J.P.