Fund Makes Its First Acquisition

October 4, 2004
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GRAND RAPIDS — Bridge Street Capital Partners recently announced its first acquisition, the Pennsylvania-based apparel maker Jacob Ash Co.

Formed in connection with The Right Place Inc., Grand Rapids' first and only private equity fund closed on its initial investment of $30 million in April. It doing so, it announced that the fund was going to aggressively pursue investment opportunities that fit

Bridge Street
's criteria as nearly as possible.

The fund, managed by John Meilner and Bill Kaczynski, was seeking companies in the $5 million to $50 million range that had a capable management team in place, were cash-flow positive and profitable, were located within the Midwest, and had the ability to grow organically and not necessarily through acquisitions.

The ideal scenario for the fund, Meilner explained, would be a family-owned company in which ownership was seeking to exit the company, with hopes of selling to management — and although management was well compensated, it still didn't have the necessary capital.

"We're looking at entrepreneurs and founders of companies who for reasons other than the business, such as retirement or health, are seeking to sell," Meilner told the Business Journal in April.

"Many owners thought about selling in the late '90s," Meilner said, "but times were good. They were growing, profitable. But the last couple of years have not been nearly as much fun, and some of the folks are just flat-out tired. We want to be a solution to that business owner."

In Jacob Ash, Meilner found a company that fit that model to a tee.

Based just outside of Pittsburgh in McKees Rocks, Pa., Jacob Ash designs, sources, merchandises and distributes specialty, seasonal winter apparel. It sells primarily to leading national retailers including mass merchants, department stores and sporting goods outlets.

Sixty percent of its sales are private label, while 40 percent of sales are under its brand names, including Hot Shot and Rhino.

The company is over 70 years old and in its third generation of family ownership, but the family has had no involvement with running the company for nearly a decade.

During Meilner's marketing efforts, he met with advisers for the Jacob Ash family.

"I was just telling people the

Bridge Street
story and I ran across the advisers for the family," Meilner said. "I was telling them about it and they said, 'We've got a company for you.'"

Meilner first began talks with Jacob Ash — one of more than

60 opportunities Bridge Street
has investigated — in late spring and completed the acquisition Aug. 6.

"This is just right in there on all counts; even the situation of the family looking for an exit," Meilner said.

"We were introduced to the management team and they were a very talented group, and we were thrilled to partner with them. Everything just fit together perfectly. We expect the company to grow very rapidly and aggressively over the next few years."

Bridge Street is now making plans with management on how best to utilize the company's resources to facilitate growth. The company's operations will remain in Pennsylvania, and day-to-day control will remain with the management team.

It is

Bridge Street
's policy to not release financial data on its acquisitions.

Geographically,

Bridge Street
limits itself to opportunities within the upper Midwest. "We'll look at things in a state that is either touching a GreatLake or that can be reached by plane in an hour," Meilner said in April.

"The nature of the business is that we cannot limit ourselves to West Michigan."

When he closed the acquisition, Meilner was able to reach Pittsburgh in 58 minutes, just within his geographic limits. Since then, however, GeraldR.FordInternationalAirport has ceased offering non-stop service to Pittsburgh     

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