Using its PSPT Holdings Co. as a vehicle for the transaction, Lynch Investment Company announced Oct. 15 that it acquired Precision Screw Products Co. Houlihan Lokey Howard & Zukin served as financial advisor and negotiated the transaction on behalf of Precision Screw.
The deal officially closed June 1, but due to contractual obligations defined by PSPT, neither Lynch nor Houlihan Lokey were permitted to discuss the deal until recently. Terms of the deal were not disclosed.
“PSPT asked for the delay so they could arrange and hold meetings with Precision’s customers, to discuss the acquisition and prepare them for the change,” said Marie Ali, the marketing communications manager for Houlihan Lokey.
Lynch Managing Partner John Benefield indicated the firm’s equity investment fell in its typical $10 million to $100 million range, conceding this investment was on the low edge of that range. He noted Lynch would consider add-on acquisitions as the firm looks to grow the company. Further, Benefield cited the company’s existing product line as a driver for the company’s expected organic growth.
Los Angeles-based Houlihan Lokey’s director in its Dallas office, Jim Massey, introduced officials at Lynch to Precision’s owner in 2001. “Precision Screw was a family-owned and operated business, and the owner, in his mid-60’s, was ready for his big liquidity event,” said Massey. “The owner was adamant about finding the right buyers, and luckily PSPT was nearby in Grand Prairie [a Dallas suburb].”
Benefield added, “The [bidding] process was competitive, but we developed a good relationship with the seller and tailored our offer to fit their specific needs and requirements.”
Upon the completion of the deal, Lynch plans to make a few changes to the management team at Precision, as both the CEO and chairman have retired.
Lynch Investment Co. is a Dallas-based private equity firm, focusing on small to mid-market companies with a value of up to $200 million. Lynch primarily invests in Old Economy companies that run service-oriented businesses, and collects the equity for each acquisition on a deal-by-deal basis. The firm’s portfolio currently consists of eight companies, in the produce, industrial, chemical and transportation sectors.
Precision Screw is a manufacturer of post-tension fasteners and concrete accessories used in residential, commercial and highway construction. The company’s products are marketed under the SURE-LOCK and Grabb-it brand names.