NY Shop Lands Plastics Company For Second Deal

Target: GI Plastek

Price: Undisclosed

Sponsor: Wincove Capital

Seller: Undisclosed

Wincove Capital executives believe an expansion and upgrading of manufacturing facilities will generate a worthy return for its second investment, GI Plastek, a Wolfboro, N.H.-based maker of molded plastic products. GI Plastek’s products include school bleachers, products used in water treatment valves and other complex molds for the educational, military, medical and industrial industries.

The company was considered a non-core asset by its previous owner, a real estate investment firm, according to Michael McGovern, a partner with Wincove Capital, a New York-based lower mid-market shop. McGovern declined to name the seller. He added that the previous owners tried unsuccessfully to shop the company last year.

Though he declined to discuss the price, McGovern suggested the firm paid relatively little for the company, telling Buyouts the deal had a “value orientation” for Wincove Capital. Firm executives believe they can generate a decent return by upgrading its manufacturing capabilities and expanding its customer base. The Wincove Capital team has been working on the deal since the beginning of the year.

Boston-based Wells Fargo Business Credit provided a senior credit facility, while Spring Capital Partners, a Baltimore-based mezzanine investor, and MB Capital, a Boston-based lender, provided subordinated debt.

In 2005, GI Plastek suffered a serious blow to its business when the U.S. Post Office, for whom GI Plastek developed thermoplastic mailboxes for apartment buildings and housing complexes, switched to stainless steel from plastic, citing post-Sept. 11 security concerns, according to Plastics News. The contract had accounted for more than 30 percent of the company’s business. Partly as a result GI Plastek shut down a plant in Marysville, Ohio, that employed 117.

GI Plastek is the second deal for Wincove since beginning operations in January 2008. In March 2008, the firm acquired Connect-Air International Inc., a Seattle-based company that distributes wire and cable products, from its founders, brothers Michael and Ron Jones. Terms of the deal were not released.

Wincove Capital does not have a fund but instead is backed by an affiliate of Harris Preston & Partners, an Austin, Texas-based investment management firm that invests in mid-market companies and in co-investments. The firm has no immediate plans to raise its own fund, McGovern said.

Wincove Capital seeks companies in niche manufacturing, specialty distribution and services with $2 million to $8 million of annual EBITDA. The firm typically invests $10 million of equity per deal.

Wincove Capital is led by John Lenahan, a former vice president at Hampshire Equity Partners, which he joined in 2003 and where he was responsible for finding new deals and managing portfolio companies; John McAlister, who for the last 12 years has been an executive for four private equity companies, including Viasystems, a former Hicks Muse portfolio company; and McGovern who, like Lenahan, was formerly a vice president at Hampshire Equity, where he shared similar duties with Lenahan.