Corporate Carve-Out Case Study

Gamber-Johnson

The Business

Gamber-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.
"Main Street provided both the debt and equity, as a result, the closing of the sale process was very straightforward. Potential conflict or misalignment of interests between equity partners and lenders is avoided with this approach. And, going forward, the management team knows that the alignment which existed at closing will continue through the long-term as all stakeholders’ interests are in sync." Brian Wagner, CEO, Gamber-Johnson

The Transaction

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.

The Results

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

Transaction Summary

Company

  • Sophisticated and driven management team
  • Diversified, blue-chip customer base
  • High barriers to entry due to proprietary IP and OEM certification process

Transaction Type

  • Corporate carve-out
  • Management-led buyout
  • One-stop financing

Original Investment

  • $40,155,000 (debt and equity)

Investment Structure

  • Revolving line of credit
  • Senior secured debt
  • Majority equity investment