- PE arm of Chicago trader HC Technologies
- Run by Managing Partners John Kelly, Matt Moran
- Michigan injection mold manufacturer first investment
HC Private Investments made its first acquisition, buying Kruger Plastic Products, a custom injection molding manufacturer.
Terms weren’t disclosed, but Managing Partners John Kelly and Matthew Moran told Buyouts the firm invested between $10 million and $30 million of equity. The deal included minor leverage, they said, with Wintrust Financial Corp providing debt financing.
Kelly said the deal “aligns very well with our investment focus and thesis, whereby we partnered with the founding owners, a family member as well as other members of the management team, to purchase the company and bring effective resources to bear.”
The selling shareholders were President Pat Brandstatter, VP of engineering Dirk Kruger and former CFO Todd Tyler. Brandstatter and Kruger will maintain significant stakes and stay involved in the company.
Based in Bridgman, Michigan, Kruger employs around 100, serving customers in consumer, industrial and recreational-vehicle end markets. HCPI plans to expand into new applications including medical devices.
The company “hit a lot of hallmarks we look for in our deals,” Moran said. “Kruger has been around since the 1970s. Pat and Dirk have been running it for the last 20 years and have built a really nice, stable group of blue-chip customers.” Plastic injection molding is “a pretty mature industry” but also “generally fragmented,” offering opportunities for both organic growth and add-ons.
“Kruger has a very detailed process and relationship with their customers,” Kelly added, “really an end-to-end situation, being involved in product design, manufacturing, assembly, even in many cases inventory management, and so we found that platform to be very exciting.”
Founded in December 2016, HCPI invests capital from HC Technologies, a Chicago principal trading firm led by Joe Niciforo. The firm will also include certain family offices and wealthy individuals in its deals. Target companies are manufacturers in the lower-middle market, defined as $2 million to $10 million of EBITDA, within the consumer and industrial spaces.
HCPI looks for investments where it can provide the first institutional capital, “and also opportunities where executives within our network can provide help evaluating the deal and either serve on the board or join the team full-time,” Moran said, adding that Kruger fit these criteria.
The tool room at Kruger Plastic Products. Photo courtesy of the company