Overview
Established in 1910, Acushnet Rubber Company, Inc. d/b/a Precix (“Precix”) is a leading manufacturer of mission critical, high performance custom molded elastomer seals and O-rings for the global automotive, aerospace, energy, and industrial markets. The Company’s 350 employees produce over 1 billion parts annually from a single manufacturing facility in New Bedford, Massachusetts.
Bigelow Assignment
To proactively seek out the best new majority owner for the Company. The incumbent majority owner was an investment fund that had obtained its ownership when the Company was struggling in a “turnaround” and now, after years of improvement, had decided to exit. The management team wanted to secure a global partner that would support continued worldwide growth for all of Precix’s stakeholders.
Challenges
Could Bigelow find an investor that would fully appreciate the U.S. leadership position that Precix had built in high performance fuel seals? Would the rapidly improved financial performance be considered sustainable? Could investors stomach a series of legacy issues that were common for a business that is over 100 years old? Could Bigelow overcome the overwhelming negative Investor sentiment about auto?
“We had never even heard of ZD before! Bigelow uncovered their interest and now, we have teamed-up with the Chinese leader—one that is entrenched in our single largest potential growth market—Asia.” David N. Slutz, Chief Executive Officer Precix
“The whole Bigelow team really did an outstanding professional job. Throughout our engagement they built up a tremendous amount of credibility not just with our ownership group and management team, but impressively with the buyer. In the end this was paramount. The valuation exceeded our expectations and they delivered in our time frame.” John C. McDonough, Partner / Incumbent Owner Endurance Capital
Outcome
Bigelow prescribed an engagement architecture of going wide to strategic investors, private equity platforms and experienced private equity firms. After in-depth qualifying conversations, Bigelow down-selected to fewer than 25 investors to share confidential information under non-disclosure agreements. Utilizing technology enabled real-time presentations, Bigelow shared key highlights of the Precix investment opportunity, while interviewing Investors as to their strategic fit. Perhaps even more importantly, Bigelow made sure that the legacy issues were clearly understood.
The Company received ten offers including four from compelling international strategic acquirers — a testimony to the Company’s global appeal. After evaluating the merits of each, the Company concluded that the best long-term fit for its stakeholders was to team up with the leading manufacturer of rubber sealing parts for automotive applications in Asia. Anhui Zhongding Sealing Parts Co., Ltd. (“ZD”) is a $1.2 billion market capitalization public company traded on the Shenzhen Stock Exchange (SZSE:000887).