Detroit-based Huron Capital Partners recently announced the acquisition of York Tape & Label, wrapping up its third acquisition in the third quarter. The deal closed on Sept. 16. Financial terms were not disclosed.
York Label is a supplier of high-end pressure-sensitive label solutions, serving a blue-chip customer base with a diverse range of end-user markets, including food, health and beauty aids, security, beverage and pharmaceutical companies.
Comerica Bank provided the senior debt, while RBC Capital and Midwest Mezzanine provided subordinated debt and preferred stock. Huron, meanwhile, partnered with management to supply the equity portion of the deal.
;The York transaction was right in our sweet spot. The company is a leading player in the label industry with a great management team and strong market demand for their products,” Peter Mogk, a partner at Huron, said in a statement.
Managing Director Brian Demkowicz added that the company generated top-line growth of around 10% in 2001, even as the industry as a whole sustained a drop-off for the year. He said York Label has doubled its revenues over the past five years, and added that the pressure sensitive, or prime, label segment in which York Label resides has seen more rapid growth than that of the glue-applied label space. Demkowicz also said the company operates one of North America’s largest flexographic label-printing facilities.
Huron will look to grow York Label through acquisitions, in addition to its expectation for continued organic growth. The firm will be looking for add-on deals that expand the company’s reach and Huron will also keep an eye out for acquisitions that add to York Label’s product line, ideally adding companies that would provide different applications within the pressure-sensitive and prime label market. However, Demkowicz said Huron will not constrain itself to these requirements when looking at possible deals.
In a separate acquisition, Huron completed its second add-on deal in as many months, further bolstering Delta Educational Systems with its purchase of The Creative Circus, an Atlanta-based advertising vocational school. (In September, Huron acquired McCann Education Centers, in its other add-on deal for the platform company.) Delta has more than doubled in size since Huron acquired the company in February, achieving its growth through acquisitions as well as an increase in students enrolling in classes.
;The firm typically targets areas with the wind at its back from the industry standpoint and looks for companies that possess a great management team and are able to differentiate themselves from their competitors,” Demkowicz affirms. Huron Capital Partners used its $72 million Huron Fund for the acquisitions, and Demkowicz said the fund has deployed roughly two thirds of the capital so far. The firm generally invests in companies that have a $10 million to $100 million enterprise value and an equity investment of between $7 million and $10 million. Looking ahead, Demkowicz expects Huron to announce another add-on education acquisition by the end of the year, and he said the firm is “toying with the idea to begin seeking capital for its second fund, possibly in the first or second quarter.