A Clear Strategic Vision
Invested Banker to the Consumer Industry

A Clear Strategic Vision

Description
TARGET: Trico Products, Inc.
OWNER/PARENT: Kohlberg & Company, LLC
COUNTERPARTY: Crowne Group LLC
SEGMENT: Home & Auto
TRANSACTION VALUE: Undisclosed
CLOSING DATE: September 30, 2014
ROLE: Exclusive Financial Advisor

Trico Products Corporation (“Trico” or the “Company”), a portfolio company of Kohlberg & Company (“Kohlberg”), is the largest manufacturer, marketer and distributor of windshield wiper blades, systems and components in North America. Designed and engineered with Original Equipment (“OE”) quality, Trico’s wiper products serve vehicle manufacturers, technicians and drivers everywhere. From conception to production and delivery, the Company provides superior visibility solutions – full wiper systems to wiper blades, arms, motors and linkages – making tomorrow safer for everyone on the road.

Trico operates as a fully integrated business with leading market positions in North America in both the Automotive Aftermarket segment and the OE Truck market segment. This synergistic business model has enabled Trico to become the largest wiper company in North America, supported by industry leading R&D, low cost production capabilities, the broadest product line in the industry and an emerging position within key international growth markets. The Company is based in Rochester Hills, MI.


“Thanks to Sawaya Partners, this was the best M&A process I have been involved with in my professional career to date. It was a breath of fresh air to work with an investment bank that understood our business and our vision. They approached every aspect of the process with unmatched creativity and dedication. Kudos to Sawaya Partners for getting our team’s message out in a great set of marketing materials and a fantastic Management Presentation process.”

MICHAEL BORELLIS
CHIEF FINANCIAL OFFICER, TRICO PRODUCTS CORPORATION


The Company was founded in 1917 by J.R. Oishei with the introduction of the first windshield wiper (i.e., Rain Rubber for the original slotted, two-piece windshields). Trico has been at the leading edge of product innovation ever since. Trico has pioneered numerous “first-to-market” innovations resulting in over 1,200 unique patents and nearly 370 trademarks granted. Today, Trico offers the broadest line of products from opening to premium price points.

Kohlberg acquired the Company from Tomkins plc in 2007. Under Kohlberg’s ownership, Trico successfully implemented a comprehensive strategic repositioning plan which provided the Company with an industry leading product development capability, a low cost manufacturing platform and a powerful retail merchandising model. Led by a team of seasoned industry executives, Trico successfully navigated through the macroeconomic headwinds of the 2008-2010 recession and grew EBITDA substantially under Kohlberg’s ownership.


In 2013, Kohlberg engaged Sawaya Partners to begin working with the Company well in advance of a potential sale process. Kohlberg selected Sawaya Partners as a result of the firm’s expertise in advising automotive aftermarket companies, as well as the firm’s industry leading completion rate and strong track record of succeeding where others have failed.

From the outset, Sawaya Partners worked closely with Kohlberg and Management to create a comprehensive plan to optimize the process objectives:

  • Crafting a Compelling Story: Sawaya Partners helped the Company to create a differentiated story that truly captured the essence of Trico’s business. One of the key elements of the story was the notion of Trico’s “DNA”. From the very beginning, Sawaya Partners identified the synergistic relationship between Aftermarket and OE segments as a key competitive advantage. Potential buyers were educated by the marketing materials on the benefits of the fully integrated business model and why that allowed Trico to gain share and achieve its leading market position.

  • Strategic Growth Alternatives: During the preparation phase of the process, it was clear that Trico was at a strategic inflection point in its corporate development. Consequently, Sawaya Partners assisted Management in the articulation of the Company’s Board approved growth plan by highlighting Trico’s full range of opportunities for profitable growth domestically and internationally.

  • Process Dynamics: Sawaya Partners orchestrated a broad sell-side process. Following initial indications of interest and a series of Management Presentations, Sawaya Partners worked with Kohlberg to narrow the field to those buyers who submitted the strongest proposals. These buyers were then invited to visit to the Company’s headquarters and manufacturing facilities. Sawaya Partners managed the diligence and final bidding phase of the process in a way that served to increase buyers’ level of interest, and ultimately valuation for the Company. Crowne Group LLC (“Crowne”) emerged as the winning bidder. The strategic fit was compelling. With its recent purchase of Carter Fuel Systems, Crowne’s sales were evenly split between Aftermarket and OEM customers. As a result, Trico’s fully integrated Aftermarket/OE business model fit perfectly with Crowne’s strategy.


“From the onset, Sawaya Partners impressed us with their comprehensive understanding of the automotive aftermarket, their intimate knowledge of both strategic and financial buyers, and their ability to drive the sale process to a successful close. Throughout the process, they exceeded our expectations on all fronts from helping Management craft the story to flawless process execution. Sawaya Partners’ expertise, creativity and relentless focus on our project contributed to a highly successful outcome for Kohlberg. “

AHMED WAHLA 
PARTNER, KOHLBERG & COMPANY

Sawaya Partners received high marks from all parties involved for its ability to manage the complexities of the process from beginning to end. Terms of the transactions were not disclosed but the results of this sale transaction were viewed by Management, Kohlberg and Crowne as a “win-win-win” outcome. In a market environment where only 50% of middle market sale transactions are successfully consummated (based on industry estimates), the Trico closing is yet another example of Sawaya Partners’ industry leading record of completion rates.

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