Closed Deals: Riverlake Keeps Humming With Decorative Systems –

Riverlake Partners will rev up its investment engines again for its acquisition of the Decorative Systems Division of U.K. automotive group Pressac plc, which it purchased recently for approximately $30 million in cash, in a transaction that gives Riverlake control of 70% of the company.

Pressac plc is a group of companies specializing in the supply of electrical and electronic components to the automotive, telecommunications, connectors and industrial systems markets. The Decorative Systems Division, acquired by Riverlake, which renamed it Advanced Decorative Systems (ADS), has operations in two locations: Millington, Mich. and Glasgow, Scotland. ADS produces decorative appliques for the automotive industry.

The total purchase price of this transaction represents a multiple of 3.6x the trailing EBITA adjusting for the effects of the sale/leaseback transaction. The $5.5 million in equity contributed by Riverlake came from two of its funds, Riverlake Partners I and Oregon LP. Key Principle Partners and GIV Capital provided the junior financing and LaSalle Bank Corp. provided the senior credit. It was released that LaSalle contributed $14 million, while Key invested $6 million and the remaining junior financing was contributed by GIV.

This deal was a private negotiation between Riverlake and Pressac. According to Erik Krieger, investment principal at Riverlake, the firm’s strategic partner, Lincoln Partners, introduced them to the deal via its relationship with Close Brothers, a U.K. investment firm. Negotiations began late last year and culminated in the transaction this year, Krieger added.

Pressac was struggling a bit after an acquisition several years ago, which would migrate it into the telecom, mobile handset business, but after this acquisition, one of Pressac’s major customers stopped buying from them, Krieger said.

“This put Pressac into somewhat of a tough position,” said Krieger. “It put them behind the curve a bit for the past several years and….I think the banks were in a position where they were driving a lot of need for Pressac to divest their assets.”

So, while the company was somewhere in the midst of all this, Riverlake stepped in. According to Krieger, Riverlake liked the “cockpit” area because of the fact that more car companies have been pouring money and energy into upgrading the interior of cars, and, in addition, liked the management team.

“It is the only company-ADS-in the space that has worldwide operations, with both U.S. and European manufacturing capabilities,” said Kreiger. “We believe that the cockpit area has great growth opportunities.”

Krieger adds that the company also has a process technology that can segue ADS into new markets, such as consumer products, electronics, telecom and additional automotive markets.

Riverlake will keep existing management, and will also unite the plants under “one umbrella,” said Krieger. And he adds that there is a strong possibility that under Riverlake’s ownership, ADS could potentially expand into Asia within the next two to three years, as well.

This is Riverlake’s first acquisition in the auto sector; however, the firm has already begun to explore additional add-ons.


Target: Decorative Systems Division

Buyer: Riverlake Partners

Financial Advisor: Pressac: Close Brothers

Legal Counsel: Pressac: Nabarro Nathanson; Riverlake: McDermott Will & Emery