Blackford Capital keeps pushing acquisitions
One of the private equity firm’s companies just expanded with a merger.
Blackford Capital, a private equity firm that relocated to Grand Rapids in 2010, is busy acquiring more companies even as it continues to rack up awards and honors in the business world.
Blackford will be among nearly 60 companies from across the state to be honored at the 11th annual Michigan Celebrates Small Business on May 7 at the Lansing Center in downtown Lansing.
Awards include Michigan 50 Companies to Watch, Main Street USA, Small Business Innovation, Government Contractor of the Year, Small Business Person of the Year, Small Business Exporter of the Year and more.
To be considered for the Michigan 50 Companies to Watch award, companies must be privately held and headquartered in Michigan, have between six and 99 employees, and generate between $750,000 to $50 million in annual revenue or have working capital from investors or received grants in 2014.
Blackford Capital has been announced as one of the 50 Companies to Watch in Michigan this year.
The firm, founded by Grand Rapids-area native Martin Stein and headquartered in downtown Grand Rapids, has a staff of 15 and four managing directors, one of whom is Stein. Its estimated revenue in 2015 will be about $6.5 million, not including revenues of the individual companies it owns and operates.
Blackford Capital has closed on 33 business acquisitions or sales since it began in 2000. Stein said the firm now owns at least 15 individual businesses in eight states, organized around a core of seven “platform” companies acquired over the years. Four of those platform companies are in Michigan, as part of the Michigan Prosperity Fund started by Blackford almost three years ago.
The firm, which also has an office in Santa Monica, Calif., acquires, manages and grows middle-market manufacturing, distribution and service companies. The firm’s investment criteria targets mature, profitable businesses with revenues between $20 million and $100 million, with management teams that are either willing to remain with the company or are seeking to retire.
Stein, 43, said Blackford Capital may be deemed an interesting company to watch because it is the only private equity firm in the U.S. that has a fund dedicated solely to investing in one state. That is the Michigan Prosperity Fund, set up by Blackford in 2012 to generate best-in-class returns for investors within the state while at the same time supporting the Michigan economy by maintaining local ownership of Michigan companies and protecting and creating jobs locally.
Former Michigan governor John Engler chairs the fund, and Mark A. Murray, Mary Petrovich and David L. Porteous are also on the board.
The Michigan Prosperity Fund made its first investment in 2012 in Custom Profile, followed in June 2013 by an investment in Mopec. Custom Profile is in Grand Rapids and specializes in extruded plastic products for the appliance, furniture, office and marine industries. Mopec, a medical equipment manufacturer producing pathology and mortuary equipment, is in Oak Park, Mich.
In 2014, the Michigan Prosperity Fund invested in two more companies: Grand Transformers Inc. and Burgaflex NA. Grand Transformers is in Grand Haven and designs and manufactures transformers and other custom inductive components for the electrical industry. Burgaflex is in Fenton and produces tube and hose assemblies for heavy truck and agricultural equipment markets.
Stein said last week Burgaflex had just acquired another business based in Germany.
The other deal announced by Blackford Capital last week was Amtech Corp.’s merger with Hanover, Pa.-based McClarin Plastics Inc. Amtech is a major manufacturer of fiber-reinforced plastic components based in Yakima, Wash., and it is one of Blackford’s portfolio companies. The new company, McClarin Plastics LLC, will be headquartered in Hanover.
Established in 1987, Amtech is a diverse manufacturer of composite-based products and parts distributed in both the military and commercial markets.
Blackford acquired Amtech in 2008, and has grown the company’s annual revenue from $9 million to $38 million — and that was before the merger with McClarin. Blackford facilitated two previous acquisitions for Amtech and implemented operational initiatives that have driven 28 percent average annual revenue growth.
“Amtech has had an amazing trajectory over the six years since we acquired them,” said Stein. “We attribute a great deal of that success to our investment in engineering, geographic diversification and strengthening of our sales infrastructure. The merger with McClarin ticks each of these boxes and further positions us to become one of the leading players in the composites market.”
The merger with McClarin, a 61-year-old designer and manufacturer of thermoformed and fiberglass reinforced plastic components, provides Amtech new manufacturing processes, a strategic East Coast location and access to a new set of blue-chip customers, according to Blackford.
MB Financial Bank and Patriot Capital provided financing for the transaction. Over the next few years, the merger is expected to create more than 150 new jobs, spread between Yakima, Hanover and a manufacturing plant in Elmore, Ala.