Overview
Wollaston Alloys, Inc. is one of the leading designers and manufacturers of high alloy steel sand castings with complex shape and/or invoked metallurgical specifications for the defense and power generation industries. In 2005, the employees purchased 100% of the business from a European conglomerate, allowing them the opportunity to grow and steer the business under their leadership.
Bigelow Assignment
Proactively seek and structure the best next majority shareholder” for the Company, providing a liquidity event for the Entrepreneurs / Owner-Managers as well as ensuring that the legacy of the business would be perpetuated through a larger world class foundry operation. The Owner-Managers had a close working relationship with their employees and it was important that any transaction considered would create a net benefit to Wollaston’s operations.
Challenges
Under management’s direction, Wollaston executed a strategy which resulted in an end-market shift away from low margin commercial products to high margin defense castings. The result was a dramatic increase in performance metrics for the years leading up to the transaction.
However, the Company needed to overcome the challenge that the foundry industry was largely out of favor due to: numerous bankruptcies of those focused on serving the automotive industry, low margins, environmental problems, and a dearth of young talented professionals.
“Bigelow is a well-oiled, unique team—even though everyone had a distinct and individual role to play in our transaction, whenever I talked to a Bigelow, they were up to speed with the deal. In particular, I have never met anyone like John-Michael Girald, who had more command of the details of the business than guys who worked for us for years. JM, I do not say this about anyone, but I think you are one of the most trustworthy, honest, and smartest individuals I have ever met.” Mr. William F. Earley, President Wollaston Alloys, Inc.
“The longevity of my relationship with Wollaston meant I needed to refer an M&A Advisor who we could both trust implicitly. I selected Bigelow. We are so pleased with the outcome.” Mr. Thomas J. O’Conner, Partner G.T. Reilly & Company
Outcome
Bigelow’s proprietary engagement structure focused on proactively seeking the best next prospective investors. Bigelow identified and solicited several highly qualified investors, ultimately resulting in the selection of Consolidated Precision Products, Inc., (“CPP” a portfolio company of Arlington Capital Partners). CPP operates 10 foundries in North America and Europe, and manufactures investment and sand castings to the aerospace industry. Arlington Capital is a Washington, D.C.-based private equity firm with over $1.3 billion of committed capital.
Bigelow’s aggressive and proactive positioning of Wollaston to new investors allowed CPP to appreciate and fully value Wollaston’s differentiation, including: high-tech alloy content castings for crucial defense programs; rapid improvements in profit margins validated by a business mix shift with realistic and defensible proforma models; high quality management with a desire to be owners in a combined enterprise; long-term (often sole source) relationships with key defense contractors and their suppliers; strong environmental policies and controls.
Financially, the acquisition of Wollaston resulted in an average annual return (IRR) for its shareholders in excess of 100% over the six years they were owners. The three Owner-Managers continued in their leadership roles after the transaction, with minimal change to the daily operations and the employees.