Vibration Mountings and Controls, Inc.

Management buyout of vibration isolation and seismic control components manufacturer from corporate parent

• Overview:
  • VMC was a division of Aeroflex, Inc. with an established 100 year old industrial brand, providing vibration isolation and seismic control solutions to the industrial, military and construction markets
  • Performance declined after illness and death of President in 2002
  • Aeroflex determined that VMC no longer fit its core strategic focus and decided to sell the division in 2004
  • Select management and owners of VMC’s largest distributor proposed an acquisition of the Company
  • Aeroflex received other indications of interest from strategic buyers but favored management team bid, assuming financing risk can be minimized
  • Challenge was to obtain financing commitments for a highly leveraged capital structure with substantial pro forma cost savings assumed and a tight closing timetable.
• Transaction:
  • Transaction closed in March 2005
  • Compelling turnaround story and committed management team created substantial interest from lenders, resulting in several term sheets
  • Management retained a control position.  Hill Street Capital and PNC Business Credit provided the debt financing and Cave Creek Capital provided the “deep pockets” to fund future growth
• Results:
  • Revitalized management team and workforce produced immediate financial performance improvement
  • Excess overhead and costs under prior corporate owner trimmed as planned
  • Acquired competitor Amber Booth in 2007
  • Sales grew more than 200% and backlog reached record levels within three years
  • Management recapitalized the mezzanine debt and equity with Fifth-Third Bancorp in 2009 resulting in an 8x markup in Management’s original equity stake