 |
| Home | Philosophy | Investment Lifecycle | Partnerships | Investments | Professionals | Media Investments | Contact |
Date of Investment
A company affiliated with and capitalized by the Partnership acquired the assets of Old London Foods, Inc. from CPC International (CPC) in July 1997.
The Partnership sold its stake in Old London Foods to Nonni’s Food Company, Inc. (Nonni’s) on January 25, 2005.
Old London Foods, Inc. (OLF) is a manufacturer of specialty crackers and other baked products, including melba toast, traditional and round croutons, breadcrumbs and flatbreads. The company is the world's largest manufacturer of melba toast. The company’s headquarters and manufacturing facilities are located in the Bronx, New York.
Created in Paris in 1896, melba toast was first commercialized in the United States in the 1930s and 1940s under the Devonsheer and Old London brand names. Devonsheer remained an independent baking enterprise until its acquisition by Arnold Foods Company, Inc. (a management buyout by Clayton & Dubilier) in 1985. OLF was acquired in 1986 by CPC from Borden in a transaction initiated by Clayton & Dubilier. Although the combined sales of these products declined under CPC’s leadership, the Old London and Devonsheer brands maintained excellent recognition and significant retail distribution.
The company’s long-term strategy was to build equity value through the expansion of the Old London and Devonsheer brands - the increase in manufacturing efficiency resulting from further capacity utilization of the company’s facilities and the pursuit of strategic acquisitions that complemented its core product lines.
On February 8, 2000, OLF, with an additional equity contribution by the Partnership and management, acquired Quality Baking Products (Quality) in a transaction structured as an asset sale. Quality, headquartered in Ft. Lauderdale, Fl, was founded in 1947 and is the largest producer of breadcrumbs in the U.S. Concurrent with the closing of the transaction, Quality’s facility in Detroit, MI was closed and its production integrated into OLF's existing manufacturing facility in the Bronx. Quality continues to operate facilities in Knoxville, TN and Willingboro, NJ. The combined company had dominant market share in both the melba toast and breadcrumb markets.
Date of Investment
The Partnership made an investment in Phoenix Packaging Corporation (Phoenix) in December 1997. The proceeds of this investment were used to buy out an existing equity investor and to finance a portion of the acquisition of the assets of Northern Can Systems (Northern) from the Sequa Corporation. In 1993, Michael Dubilier led an investor group that helped form Phoenix.
The Partnership sold its stake in Phoenix to Sonoco Products Company (Sonoco) on September 14, 2001. The 1993 investor group and the Partnership received a blended internal rate of return (IRR) of 33 percent.
Phoenix is a manufacturer of easy-opening and pour-opening lids for the food and nutrition markets. In December 1997, the company acquired Northern, a competitive manufacturer of easy-opening and pour-opening lids also used for the food and nutrition markets. The company’s headquarters and manufacturing facilities are located in the greater Canton, OH area.
In 1993, following the acquisition of Central States Can (Central States) by Crown Cork & Seal, George Smart and a team of former managers from Central States founded Phoenix Packaging. Phoenix was subsequently formed with an equity investment by management, the Ball Corporation, several Canton area individuals, and an investor group led by Michael Dubilier. Northern was a non-core subsidiary of the Sequa Corporation, a public company with revenues exceeding $1.4 billion. In September 2001, the company was bought by Sonoco and now operates under the name Sonoco-Phoenix Inc.
Phoenix capitalized on the change in market momentum away from sanitary lids toward easy-open lids. The company increased market share, both organically and through the Northern acquisition, by maintaining and improving its excellent reputation for superior quality and customer service. Management’s extensive experience in the industry and the company’s focus on the high growth and margin segments of the specialty packaging industry also contributed to the company’s success.
Date of Investment
In April 1999, the Partnership acquired Magnetic Data Technologies, LLC (MDT) from Applied Magnetics Corporation in a transaction structured as a leveraged recapitalization. Applied Magnetics retained approximately ten percent of the equity ownership of the business.
The Partnership sold its entire investment in MDT to Solectron Corporation on June 11, 2002, generating a loss for the Partnership.
MDT is a leading provider of outsourced post-sale services to original equipment manufacturers (OEMs), including Compaq, EMC, Ericsson, Hewlett-Packard, Hitachi, Iomega, Lexmark, NEC, Nokia, Philips, Quantum, 3Com, and Western Digital. The company provides repair and warranty services for manufacturers of computer peripherals, telecommunication systems, and other electronic and digital devices. These services include hard disk drive “clean room” repair and reassembly, customer service center management, warranty administration, reverse engineering failure analysis, testing and repair of returned units, and component salvage of non-repairable units. MDT is headquartered in Goleta, CA, with facilities in Texas, Tennessee, Mexico, Belgium, and Singapore.
The company focused its long-term strategy on extending its leadership position in the growing market for outsourced post-sale services for electronics OEMs. By providing a broader array of services and increasing the number of products and programs served, MDT intended to penetrate further its existing data storage device and telecommunication customers, as well as to develop new customer relationships. Unfortunately, the company lost its largest customer within 60 days after closing. In spite of this development, MDT pursued strategic acquisitions of under-performing competitors and captive in-house OEM service and repair centers. Transactions included the purchase of Western Digital’s hard disk drive repair facility in Singapore, the purchase of EMC’s repair operation in Chihuahua, Mexico, and the provision of MDT management to a Hewlett-Packard-owned repair facility in Nashville, TN.
Date of Investment
In February 2002, Dubilier & Co. participated in the arranging and funding of Advanced H2O, Inc. (AH2O) in a recapitalization of AH2O and the acquisition of a bottling facility. AH2O had nominal revenues and operations prior to the recapitalization.
AH2O is the leading independent producer of PET bottled water in the Northwest. AH2O supplies virtually every major retail chain and warehouse club in the region. The company sells a line of branded and private-label waters. AH2O employs a proprietary electrolysis technology to produce enhanced, microstructured water. Since 2002, AH2O has significantly expanded operations, increasing the production capacity of the acquired bottling facility over four times
AH2O’s long-term strategy is focused on extending its leadership position in the growing PET bottled water market segment through both geographic expansion and line expansion. AH2O is well positioned to leverage its relationships with existing customers on both line and expansions into new regions.
Date of Investment
In April 2004, Dubilier & Co. acquired a majority ownership stake in Optical Disc Corporation (ODC), based in Santa Fe Springs, California. Dubilier & Co. subsequently acquired one of its largest competitors, U.K.-based Nimbus Technology and Engineering. With facilities in the U.S. and Asia, the consolidated operation, ODC Nimbus is one of the largest equipment providers in the optical disc industry. ODC Nimbus develops and manufacturers high-quality mastering equipment for the production of CDs, DVDs and next-generation optical discs that are used by optical media manufacturers worldwide. The company also provides specialized mastering services to optical disc technology and format developers. The company’s equipment is highly specialized, generating in excess of $1 million USD per piece of equipment.
The combined entity brings together two formerly competitive technologies, which has enabled ODC Nimbus to develop one of the only equipment systems that is currently capable for Blu-ray and HD DVD production. With its new equipment influencing over 75 percent of all discs produced for the HD DVD format, ODC Nimbus anticipates that it will maintain and grow its existing leadership position for new format equipment. Dubilier & Co. believes that Blu-ray is at the beginning of its product life cycle. As this new format evolves similarly to CD and DVD, ODC Nimbus will benefit from a powerful technology base and market leadership position.
Date of Investment
In September 2004, Dubilier & Co. and management acquired Berlin Industries, Inc. (Berlin) from a trust held by absentee owners. In 2000, new management re-energized Berlin, which was founded in 1984. Beginning in 2001, the Company has grown at a rate of over 55 percent as a result of expanded distribution and the company’s promotional efforts.
Berlin’s product line includes Zim’s Crack Crème, which provides relief to people with painfully dry and cracked skin, and Freeze-it, a topical analgesic. The Zim’s brand promotes healing through active ingredients derived from myrcia oil and arnica extract. Made from a flower named “Arnica montana,” arnica extract is a medicinal compound of European origin that has long been renowned for its topical healing qualities. Freeze-it is also an herbal formula. It includes Ilex, an herbal extract, aloe and Vitamin E. Both products have a strong retail presence, with placement in more than 30,000 stores nationwide, concentrated in drug chains and the mass channel. Recent product-line extensions include a “sting-free” diabetic formula, for those who have to prick their fingers frequently to check insulin levels, and Crack Crème Lip Balm.
Berlin offers an attractive platform for growth in its segments through line extensions and broadening market channels. This strategy for growth is well aligned with management’s expertise. Berlin attracted a significant amount of interest from other private equity firms. Based upon the success other private equity investors have enjoyed in the skin-care segment, we believe that Berlin will be an attractive acquisition candidate to industry leaders.
Date of Investment
In September 2005, Dubilier & Co. acquired DC Safety Sales Co., Inc. (DCSS) from the company’s management and existing shareholders.
Founded in 1975, DCSS has more than an 85-percent market share in North America for the design, assembly, and supply of original or standard equipment first aid kits for the automotive industry. The company sells in excess of 1.5 million first aid kits annually. The company also sells Emergency and Roadside Assistance kits at substantially higher prices. These kits are installed in more than 40 car models, including Lexus, Mercedes, Toyota, Infinity, BMW, Nissan, Scion, Volvo and Rolls Royce.
Although DCSS dominates its industry, only an approximate ten percent of the automotive market currently includes first aid kits as standard equipment, providing significant opportunities for future growth. Beyond automotive, there are several adjacent markets that offer significant opportunities. Dubilier & Co. will work with management on the company’s recent efforts to broaden channels of distribution beyond automotive.
In May 2006, Dubilier & Co. was the lead investor in Covario. Dubilier & Co.
facilitated the spin-out of this entity from its parent owner and funded the company's first outside investment. Dubilier & Co. also helped the company create an Advisory Board and contributed to its initial staffing and infrastructure. Covario has subsequently raised additional funds from institutional VCs, including FT Ventures and Voyager Capital. Dubilier & Co. is currently the company's second largest shareholder.
Covario is a pioneer in automated search marketing, with a broad range of software solutions that specifically serve Global 2000 businesses. This platform allows for the effective and profitable management of organic search engine optimization and paid search or pay-per-click marketing initiatives. The company achieves this by providing an automated dashboard supported by high-touch consulting services. The company has already been selected by some of the most prominent enterprise marketers in the world, including: Intel, HP, P&G, GE/iVillage, Accenture, Cisco, Intuit, Oracle, Adobe, Rim, and Lenovo. The company is well positioned to capitalize on the explosive growth of the search marketing space as businesses continue to shift their marketing budgets away from traditional media to the online world.
In July 1994, Dubilier & Company invested in Systech International.
Systech International is a leading provider of packaging execution systems (“PES”), which empower manufacturers with technology that enables visibility, governance and auditability of packaging-line quality and performance, as well as the ability to integrate the information into their enterprise software applications. The company’s TIPS (Total Integrated Packaging Solution) family of software-based solutions and services includes machine vision inspection, device management, packaging-line control, and information management and analytics that help manufacturers advance the quality, safety, security and regulatory compliance of their packaging processes while improving overall productivity. The company has a leading position in the global pharmaceuticals industry, with an installed base of thousands of systems and sales to all of the top 15, and 19 of the top 20, pharmaceutical companies, including Pfizer Inc, Merck & Co. Inc., Novartis AG, GlaxoSmithKline plc, Wyeth, and Cephalon Inc.
The company’s leadership in the pharmaceutical market positions it to drive dramatically improved financial results in the near term, as every pharmaceutical company that sells products into the United States will need to address its own ability to meet mandates from several states relating to e-Pedigrees and product authentication. A recently passed California law requires that all pharmaceutical companies provide an e-Pedigree, a unique tracking number and complete supply-chain history from manufacturer to end user, at the item level for every drug sold in the state, by January 2009. In addition, the U.S. Food and Drug Administration has issued guidelines suggesting the provision of a pedigree at the item level for all drugs sold in the United States, although an electronic solution is not currently mentioned. The FDA guidelines are in the form of a mandate, but the FDA’s authority to issue such a regulation is under court review.
To comply with these regulations, pharmaceutical companies will need to make important decisions about vendors well in advance of these mandates in order to have their systems operating in time. Systech’s product capabilities, domain expertise, and momentum as the premier vendor meeting the packaging-line item-level serialization requirements of these mandates position the company to gain major contracts during 2008 and beyond.
Dubilier & Company made the investment in May, 2007.
OOSKAnews is a business publishing house specializing in news delivery, analysis and business intelligence on the water sector in emerging global markets. The digital publications cover the highly charged geopolitics of private and public water sector development in Eastern Europe, the former Soviet Union, Middle Eastern and African nations as well as Southern and Eastern Asia reaching readers in more than 40 countries. The Warrenton, VA-based firm, which takes its name “ooska” from the Scottish Gaelic “uisge”, meaning water, was founded in 2006 by CEO and publisher David Duncan. Anne Gordon now serves as OOSKAnews’ executive chairman.
Dubilier & Company’s investment will enable OOSKAnews to increase its geographic reach, expand into hosting international conferences and eventually expand the independent news service to one covering a broader array of resources. Dubiler & Company will be opportunistic in expanding and acquiring other firms to expand this platform aggressively.
Dubiler & Company provided a $15 million investment facility, funding $5 million of this facility in September of 2008.
Bulletin News was formed through the combination of two businesses, Bulletin News Network, Inc. and Custom Briefings, a joint venture initially launched by U.S. News & World Report and Bulletin News Network in 2006.
The primary products of Bulletin News are electronically delivered newsletters sold at high subscription rates to clients in both federal and state governments as well as Fortune 500 corporations. Custom Briefings is a similar business to Bulletin News but it utilizes an advertising model rather than a subscription model to generate revenue. Custom Briefings gathers news of interest to professional groups and delivers daily newsletters.
Dubilier & Company is working with management to expand its footprint in several key verticals.
