MCM Capital Partners last month completed the recapitalization of OMCO Corp., a manufacturer of roll-formed structural carbon and stainless steal products.
The firm declined to disclose the value of the deal, but said OMCO generated approximately $50 million in revenue for 2000.
MCM Capital’s recapitalization, in partnership with management, provided the largest shareholder, 80-year-old founder Fletcher Gleason, with liquidity. His son, Ed Gleason, has been president of the company since 1987 and will continue on as president and chief executive officer of OMCO.
Roll forming, OMCO’s business, can be described as a continuous bending operation done at room temperature in which sheet or strip metal is plastically deformed along a linear axis. Tandem sets of rolls (known as roll stations) shape the metal stock in a series of progressive stages until the desired cross-sectional configuration is obtained.
Steven Ross, executive vice president and principal at Cleveland-based MCM Capital, described the roll forming industry as highly fragmented with plenty of opportunities for consolidation. MCM will be looking for add-on acquisitions of other roll formers around the country to increase OMCO’s capacity, Ross said.
“Right now we service customers on the West Coast, but we ship products all the way from Indiana, which is fairly expensive,” Ross said. “Through acquisitions or greenfield, we hope to get facilities in places that will more efficiently and better service these customers.”
OMCO’s core strength is in the transportation field, producing a variety of roll-formed components for trucks, trailers and truck bodies. The company has diversified its business over the past five years to serve other industries, including people moving systems, point-of-purchase displays and domestic containers.
OMCO currently has facilities in Ohio, Indiana, Pennsylvania and Canada.
MCM Capital raised its debut fund of $50 million in 1998. Prior to that, the firm had completed 13 transactions on a deal-by-deal basis. The fund is approximately half invested, Ross said.
Last year was a particularly busy one for the firm, which completed four transactions. Prior to OMCO, MCM in October led the acquisition of Petro Chemical, a manufacturer of specialty chemicals serving automotive original equipment manufacturers (OEMs) and automotive aftermarket businesses.