Fenway Partners recently sold MW Manufacturers to Investcorp for approximately $188 million, representing Fenway’s first exit since August 2001.
Including the purchase price, Fenway invested between $50 million and $55 million in MW, said a source close to the deal.
According to Greg Smart, a managing director at New York-based Fenway, MW posted revenues of $214 million in 2002. Smart refused to share additional financial details, but did say MW’s cash flow from operations tripled “resulting in the repayment of $30 million of debt since April 2000.”
Since joining the Fenway portfolio in 1995, Virginia-based MW has changed significantly. Two add-ons (New Jersey-based Patriot Manufacturing and Virginia-based Lineal Technologies), material and design upgrades at its three plants (those include the two plants acquired in the add-on purchases) and the purge and replacement of MW’s previous management team have all occurred on Fenway’s watch.
“We’ve put years of hard work into this company,” said Smart. “Performance has improved. The decision to sell was bittersweet, but after seven years of ownership, it was time for us to return capital to our limited partners.”
“Seven years is right in our sweet spot,” he continued. “We are in the business of building businesses, with a large amount of focus on operational issues that affect growth and change. This leads to a longer period of time to bring [a target company] to fruition.”
MW manufactures and distributes vinyl and wood window and patio door products, typically for residential and light commercial use in states along the East Coast. “Vinyl sales have been strong for over five years, and we achieved the top-line growth we hoped to,” said Smart.
Aside from MW, Fenway’s most recent exit was the 2001 divestiture of Delimex, a San Diego-based Mexican frozen-food maker, to consumer products giant H.J. Heinz Co. Fenway acquired Delimex in April 1997, and its original investment was roughly $100 million. Fenway and Heinz declined to disclose the precise size of the deal, but said it was between $200 million and $250 million (see Buyouts, 8/27/2001).
Fenway is currently investing its $909 million Fenway Partners Capital Fund II, which still has over $400 million in dry powder. Fenway currently has more than $1.4 billion in funds under management.
Investcorp, an investment group with offices in New York, London and Bahrain, invests in four lines of business corporate, real estate, asset management and technology. Founded in 1982, Investcorp has completed transactions with a combined value of approximately $20 billion.