Corporate Carve-Out Case Study
The BusinessGamber-Johnson (“Gamber”), founded in 1954, manufactures docks and mounts to secure rugged and non-rugged mobile computers, tablets and other equipment to professional vehicles used in a variety of industries where connectivity and durability are of the utmost importance.
Gamber was owned by Leggett & Platt as an independently-operated subsidiary that was non-core to the corporate strategy, leaving the management team with minimal capex and operating flexibility. Main Street partnered with the management team to acquire Gamber and has since continued to re-invest in the business and has empowered the management team to operate the business with a focus on maximizing value.
Within a year of closing the initial transaction, Gamber made two strategic acquisitions. First, was Gamber’s acquisition of Zirkona for its IP and unique ball joint products, which supplemented Gamber’s product offing allowing for more tablet based applications. Second, was PMT, an acquisition which expanded the Company’s market reach and presence in Canada. Main Street continues to support Gamber in pursuit of organic and acquisitive growth going forward.
Before Main Street Partnership
- Gamber was an orphaned asset of a larger parent organization, leaving it without the resources to pursue growth through organic or inorganic means
- Lack of management equity participation
- Lack of autonomy and company culture
- No “sounding board” for historical owners with respect to operational and strategic matters
After Main Street Partnership
- Main Street’s partnership unlocked the Company’s growth potential by enabling management to make strategic investments and pursue accretive opportunities
- Management invests directly alongside Main Street and has further upside with an incentive equity plan
- Empowered management team with strong alignment of interest alongside Main Street
- Formal board is in place and an ongoing dialogue continues between the company and Main Street to discuss strategic initiatives
- Sophisticated and driven management team
- Diversified, blue-chip customer base
- High barriers to entry due to proprietary IP and OEM certification process
- Corporate carve-out
- Management-led buyout
- One-stop financing
- $40,155,000 (debt and equity)
- Revolving line of credit
- Senior secured debt
- Majority equity investment