Preferred Compounding Corp.           

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Preferred Compounding Corp

Preferred Compounding Corp. of Barberton, OH, a portfolio company of The Watermill Group of Lexington, MA, has been acquired by Wingate Partners of Dallas, TX. Sperry, Mitchell & Company, Inc. initiated this transaction, assisted in the negotiations, and served as exclusive financial advisor to Preferred Compounding Corp.

 

Preferred Compounding Corp. Case Study

Overview

Preferred Compounding Corp. (preferredperforms.com) is a leading provider of highly-engineered, high-performance elastomeric compounds.   Founded in 1973, the Company provides turn-key compounding services to rubber component manufacturers in a diverse range of end markets, including construction, consumer, energy, infrastructure, medical and transportation. Watermill Group (www.watermill.com) is a private investment group which acquires North American-based middle market companies, primarily focusing on the manufacturing, distribution and service industries.

Wingate Partners (wingatepartners.com) is a private equity firm focused on control investments in manufacturing, distribution and service businesses with sales between $50 million and $250 million. Wingate specializes in partnering with management in companies facing an industry transition.

Situation

  • Watermill Group had been invested in Preferred Compounding since 2002 and, after strong growth despite the ongoing recession, were eager to realize a return for their investors.
  • Sperry Mitchell has a long history with Watermill, and with Preferred Compounding, having previously sold the Company in 1997 to Edgeview Partners.
  • The Watermill partners wanted to close by year-end.

Sperry, Mitchell Solution

  • We cultivate relationships and consistently provide good counsel and service. We advised Watemill for no fee on the initial purchase of Preferred Compounding as well as throughout the firm’s eight year hold period. Our intimate knowledge of the deal ensured that we were the best broker for the sale process.
  • When appropriate, we always go wider in terms of approaches. Although Watermill did not initially want to approach Wingate, they ended up emerging as the best buyer from the process. One never knows who the most aggressive buyer will be, so leveraging Sperry Mitchell’s broad network of financial and strategic buyers is essential to securing the best deal available.
  • We move quickly to close deals. The deal with Wingate was consummated 70 days after the signature of a letter of intent, fulfilling Watermill’s desire to close before the end of 2010.