SUMMARY 

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In business since 1964, Air Power Service Co., LLC ("APSCO") is a leading designer and manufacturer of engineered products including pneumatic cylinders, controls and valves for the mobile, truck equipment and automotive markets.  The company operates out of its ISO 9001:2015 certified manufacturing and fabrication facility in Tulsa, Oklahoma.  The company was purchased in late 2015 from the founder's estate by Pennington Capital and Imperial Private Equity.

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TIMING IS EVERYTHING  

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The current private equity owners of APSCO had only recently purchased their stake in the company from the founder's estate just over a year prior our engagement.  The new owners had already successfully refocused the company on growth, centered on two key initiatives: new product development and taking a more strategic approach to distribution and end-users.  Their initial 5-year plan was to almost double the EBITDA of the company, which would lead to a successful exit of the business.

 

The introduction to Romanchuk & Co. was made through a current investor in their fund, and former client of Romanchuk & Co.  During our introductory meeting with the ownership group, we provided updated information on the current state of the industrial M&A markets and the valuations we were seeing, and suggested that although it was earlier than they had planned, it may be a good time to look at their options.  The owners decided to engage Romanchuk & Co. to explore a potential secondary buyout transaction.

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WORKING IN THE BACKGROUND  

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Due to the recent transaction they had just been through a year earlier, the ownership group was very concerned about their current management team becoming aware of a process being underway. Romanchuk & Co. had a preliminary meeting with the CEO of the business on-site and was given a tour of their facility.  From that point on, all information and materials were generated without any further on-site presence from the Romanchuk & Co. team.

 

Working with the owners, we ran a limited auction process to mostly engineered products & manufacturing focused private equity groups.  It was decided that the risk of marketing the company to strategics was not worth the potential uptick in valuation that may be realized.  

 

After a four-week marketing process, we received several indications of interest.  We   narrowed down the indications to one final offer from TGP Investments from Kansas City, Missouri.  It was very important for the owners to not only receive a favorable valuation, but to also make sure there was a good philosophical fit with the new owners to ensure a secure future for APSCO and its employees.

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The deal progressed through due diligence and legal documentation smoothly and closed in just a few months.

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“Romanchuk & Co. was the right choice for us. We feel they were able to not only maximize the value of APSCO during the process, but they also made sure we had several great options to consider – which resulted in the selection of the right partner for the business going forward.”

          - Shawn Walsh, President of Imperial Private Equity 

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INDUSTRY EXPERIENCE PAYS OFF  

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Industry knowledge and relationships are important factors to consider when choosing an investment banking firm to represent you and your company during a transaction process.  Romanchuk & Co. was able to help maximize value during the APSCO transaction process by leveraging their relationships within the industrials space and putting together a buyer’s list of qualified, active buyers in the industry.  Because of our industry knowledge and expertise, we were also able to put together the marketing materials with limited input from management – allowing them to focus on the daily operations and manage the growth of the company – both vital ingredients to a successful transaction process.