The Riverside Company recently signed a letter of intent to purchase four entities from Dana Corporation. Neither company would offer specifics, but Tim Gosline, a partner at Riverside, told Buyouts the deal prices fell within Riverside’s range for deals – between $10 million and $100 million – and in 2001, the four entities to be purchased had booked $81 million in sales.
Included in the deal are Tekonsha Engineering Company, which makes aftermarket braking equipment for the recreation, agricultural and trailer markets; the SurePull Products facility in Sheridan, Ark., which produces towing hitches and related accessories; Theodore Bargman Co., maker of lights, locks and latches for the automotive industry; and American Electronics Components Inc. (AEC), which manufacturers automotive electronic parts.
“In October 2001, we decided to make major structural changes to our organization,” said Jeff Cole, vice president of corporate communications at Dana. “Our plan to cut 15% of all employees and sell or shut down over 30 facilities should be complete by early 2003.” To date Dana has closed 18 facilities and reduced its workforce by nine percent.
Riverside plans to spin the four entities into two acquisitions: Tekonsha and SurePull will be added to Riverside’s HammerBlow Towing platform, and AEC and Bargman will be combined to create Riverside’s newest platform, dedicated to the automotive, truck and recreational vehicle markets. The addition of Tekonsha and SurePull to the HammerBlow platform will triple the platform’s EBITDA, according to Gosline.
“Tekonsha and SurePull fit hand in glove with our existing HammerBlow platform,” said Gosline. “AEC and Bergman were also attractive, due to excellent management teams, growth opportunities and that we bought both for an attractive multiple.” Gosline also mentioned Riverside’s plans to stick with the existing management teams, “supplementing each as needed.”
Upon completion, these deals will bring Riverside’s yearly acquisition total to 12, and will bring the total amount of acquisitions under Riverside’s most recent fund to 18. The $412 million Riverside Capital Appreciation Fund 2000, closed in 2000, is Riverside’s third fund, and nearly three times the size of its first two funds combined.
Including the Dana acquisitions, Riverside has committed 40% of RCAF 2000, and, according to Gosline, the New York-based private equity firm plans to begin raising capital for a fourth fund in late 2003 or early 2004.