Monomoy Capital Partners, a leading private equity fund focused on value investing and business improvement in middle-market companies, announced it has completed the sale of ContMid Holdings Inc. (CMG) to an Italian competitor, A.Agrati S.p.A., for an undisclosed amount. The CMG sale is expected to produce up to a 4 times return on investment for Monomoy and its investors.
CMG designs, manufactures and distributes custom-engineered metal fasteners to automotive companies, Tier 1 automotive suppliers and industrial manufacturers. The company produces internally and externally threaded nuts and bolts, screws and related products for vehicle systems, including restraint systems, airbags, door hardware and ride control systems. According to Monomoy, CMG is a leading provider of Taptite products, Torx products and wheel nuts in North America. The company is headquartered in Park Forest, Illinois, and operates six manufacturing facilities throughout the Midwest.
“We acquired CMG in July of 2014 with the goal of rationalizing its cost structure, optimizing its product mix, professionalizing management and positioning the company for growth,” said Jaime McKenzie, a Monomoy director. “With a new management team in place, CMG is now among the leaders in quality, service and new product development for both the automotive and industrial fastener markets.”
“ContMid is a great example of Monomoy’s core investment strategy,” added Stephen Presser, also a Monomoy partner. “We purchased a family-owned collection of related manufacturing businesses, leveraged the firm’s unique operational capabilities to drive free cash flow and increase earnings, and successfully sold CMG as a growing company to a strategic buyer. Our approach to value creation created substantial returns for our investors over a 25-month hold period in a challenging industry.”
Monomoy acquired CMG under its second fund vehicle, Monomoy Capital Partners II L.P. In July of 2016, Monomoy closed its third fund vehicle, Monomoy Capital Partners III, L.P. with $767 million of committed capital to pursue the acquisition of businesses such as CMG.
“Monomoy was an invaluable partner throughout the transformation of CMG over the past two years,” said Phil Johnson, CMG’s CEO. “Monomoy has a deep bench of talented investment and operating professionals committed to working with middle-market companies. They helped the CMG management team create a dynamic value creation plan for the business and provided CMG with the resources, tools and strategic guidance we needed to execute the plan and emerge as a market leader in every respect. We are excited about the future of CMG, and we are confident that the company is positioned for continued success as a global leader in the fastener industry.”
Sam Tinaglia, Todd Cassidy and Laurence Bocle of William Blair & Co. acted as the financial advisers to CMG in the sale of the business to Agrati. Duff & Phelps served as a special adviser to Monomoy in the sale. Richard Porter and Amy Wollensack of Kirkland & Ellis LLP provided legal counsel to both CMG and Monomoy. Grant Thornton provided quality of earnings support for CMG in the sale process and Aon Risk Management provided insurance advice.
