Monomoy Maneuvers Hess Industries Deal –

Hess Industries Inc. has decided not to keep its business in the family anymore, as it was recently acquired by Monomoy Capital Partners in a transaction where Monomoy contributed $6 million in equity. The total purchase price was not disclosed.

Hess Industries, a family-owned business founded in 1976, provides a wide range of capital equipment, metal forming and process engineering solutions to Fortune 500 manufacturers, such as Whirlpool. Hess brings in about $60 million in revenues per year.

According to Justin Hillenbrand, a principal with Monomoy, the firm learned of Hess’s possible sale through KPMG, which served as advisor to Hess. Hess hired KPMG about a year-and-a-half ago to look at alternatives, and Monomoy began talking about a possible acquisition in early summer 2005.

Hillenbrand said that Monomoy was drawn to Hess because of its first class products and customers.

“We think we can continue the company’s longstanding tradition of high quality,” said Hillenbrand.

Hillenbrand said that Monomoy, during its ownership, will likely attempt to establish a parts and services business, which Hess currently lacks, as well as follow the company’s customers overseas. China and India will be an area of focus for them in the future, he added.

Along with these changes, there will be another, even larger change in the company after this acquisition-the retirement of founder and CEO, Tony Hess. He will leave after 30 years of leading the company and will be replaced by Dave Thomson, the former manager of the wheels division of Amcast Industrial Corp. Thomson was brought in because of his extensive background in engineering and lean manufacturing.

“Hess built a very strong company based on tradition of quality and service and we will continue that tradition with Dave Thomson,” Hillenbrand said.

Monomoy will add to Hess’s growth with future acquisitions. Though no specific acquisitions are planned, Hillenbrand said there are a bunch of small operations out there that are worthy of consideration.

He added that it is very likely that, if Monomoy does add-on to this acquisition, it will be with the purchase of a product line and not necessarily an entire company.

Comerica Bank and Basso Capital Management provided the financing on the deal. The equity contributed by Monomoy came out of the firm’s Fund I.

Hess is the second investment Monomoy has made since it was founded in March 2005. Hess will join Awrey Bakeries Inc. in the firm’s portfolio, which was acquired in August 2005.