Industry/Sector: Rubber Compounding
Deal Type: M&A – Sell Side Advisory
FourBridges Team: Andy Stockett, Chris Rowe
Client Profile: Based in Muscle Shoals, AL, Robbins was one of the nation’s oldest and largest rubber compounding producers and the market leader in manufacturing curing tubes and supplies for the tire retreading industry. The Company was estimated to be the country’s third largest custom mixer in terms of capacity. Robbins was founded in 1921 and operated three manufacturing facilities with over 200 employees.
Client Objectives: Poncet Davis Jr., the Company’s sole owner, had two important objectives: liquidity for estate planning purposes and a buyer that would provide opportunity for the management and employees of the Company. Robbins had been a family-owned business since 1941, and Mr. Davis was keenly interested in the continued welfare of its employees.
The Challenge: The CEO and COO were interested in retiring within six to twelve months after closing. As a result, the number of “financial buyers” comfortable with such a transition was significantly reduced. Additionally, the owner’s desire to maintain operations in their current state limited the number of strategic buyers. At the same time, petrochemical prices were fluctuating rapidly, which impacted gross margins.
The Process: FourBridges professionals identified private equity groups with similar platform companies or those with extensive operating experience that could bridge the management transition issue. Additionally, FourBridges developed a plan to demonstrate the depth of mid-level management to assuage concerns over a management transition. In order to address the impact of fluctuating margins, FourBridges provided a detailed cost analysis of raw materials and a customer by customer projection.
The Result: After receiving several indications of interest from both financial and strategic buyers, the Company chose an offer from Grey Mountain Partners, a private equity group from Boulder, Colorado. Mr. Davis achieved his objectives and the management and employees of Robbins found a great partner in Grey Mountain.
FourBridges Capital Advisors is a middle market investment bank providing sell-side, buy-side, capital raising, restructuring, and strategic advisory services primarily to closely-held and family-owned businesses. FourBridges is based in Chattanooga, Tennessee, and serves clients in cities across the Southeast, including Atlanta, Nashville, Birmingham, Memphis, Knoxville and Huntsville.
Past performance is no guarantee of future results, and there can be no guarantee that these results will be duplicated in the future. Any testimonials presented herein may not be representative of the experience of other clients.