This past New Year’s Eve, Audax Group probably had more reason than most to celebrate, having closed its acquisition of Thermotech, which capped off a year in which the Boston-based firm completed five deals. Terms of the Thermotech transaction were not disclosed.
Thermotech, based in Hopkins, Minn., is a contract manufacturing company that specializes in precision injection molding and assembly. Geoffrey Rehnert, co-CEO at Audax Group, noted that the business primarily services the OEM automobile sector, but also has a reach in the healthcare and consumer product markets as well. The company, which employs 585 workers, is profitable, according to Rehnert, and takes in revenue of roughly $75 million a year.
Audax acquired Thermotech from Menasha Corp., a company that has been actively divesting units as it seeks to pare its focus to its core businesses. Menasha also divested its laminating division in December, selling the unit to private equity firm Dunsirn Partners LLC. For Thermotech, this is not the company’s first experience with private equity, having been acquired by Forstmann Little in 1985 as part of ITT Corp.’s $400 million sale of certain industrial subsidiaries.
Audax was introduced to the deal by the CEO of its Nash Elmo Industries portfolio company, who also sits on the board of Thermotech. To finance the transaction, Audax has supported the deal with a senior debt package from Lasalle Business Credit that represents roughly 60% of the purchase price. While the deal terms were not disclosed, Rehnert said it fit within Audax Group’s typical price range of between $25 million to $250 million.
To grow the business, Rehnert said Audax will look for organic growth, and he also believes Thermotech should be a solid platform through which to make acquisitions. The firm will push through an effort to manage costs more effectively, and the company has already announced the closing of its El Paso plant. “We think it’s a business that can grow 10% to 15% a year through just organic growth, and we expect to supplement that with acquisitions,” Rehnert said.
The firm used its $500 million Audax Private Equity LP for the transaction. The deal capped off a fairly active year for Audax in 2003, with five acquisitions, including the purchases of Swissray International, Endurance, Chart Industries and Overton’s. .