This page contains a Flash digital edition of a book.
will have to be invested in the near future or returned to investors. Some of it has already found its way into the metalcasting industry. He believes that means the metal casting supply chain will remain strong. “Not every foundry out there is


capable of attracting these kinds of investors, so when you see it, it is something to take note of,” Rosbrook said. “T ose investors saw something, and in most cases it’s not, ‘how do we wrap it up and shut it down’ because that is not a good investment.” Phil Gilbert, president of PM


Corporate Finance, a division of accounting fi rm Plante and Moran PLLC, Chicago, said equity investors generally enter a company in one of two ways. T e most common invest- ment is a minority recapitalization, where the fi rm purchases less than 50% of the business in question but maintains special voting rights on the





Sometimes people think there is some kind of mystery or hidden factor when you get into private equity. There’s not.” —DOUG GRIMM, GREDE HOLDINGS LLC


board. T e second less common option is a traditional recapitalization, where the equity fund buys a controlling interest in the purchased business and the remaining interest is still held by the previous owner. According to Gilbert, struggling businesses (or small businesses doing less than $25 million in revenues and $3.5 million in earnings before inter- est, taxes, depreciation and amortiza- tion [EBITDA]) are less likely to attract an equity partner. But each purchase is diff erent, and each equity investor is likely to employ a unique


strategy. John Pollock of LV2 Part- ners LLC, Midland, Mich., which purchased Cast Aluminum Solutions, Batavia, Ill., in January 2010, said his company entered the metalcasting in- dustry because the company happened to fi t the strategy it had employed with success in other manufacturing sectors. “The product (custom thermal


products, often with cast-in inserts) is highly engineered and customer- focused, and that is what we seek to invest in,” Pollock said. “It’s not a commodity product. It demands higher margins because of the value


Mar/Apr 2012 | METAL CASTING DESIGN & PURCHASING | 29


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68