Mosaic acquires 75 pct of Circle 5 Tool & Mold for $27 mln

Canadian private equity firm Mosaic Capital Corp has acquired a 75 percent interest in Circle 5 Tool & Mold Inc, a Windsor, Ontario-based supplier of molding solutions to automotive parts manufacturers. Mosaic bought the stake for $27 million in cash. Saylo Lam, Circle 5’s president and operating shareholder, who will hold the remaining 25 percent interest, said the deal will support organic and acquisition growth opportunities. Founded in 1987, Circle 5 has a global customer base that includes such automotive brands as BMW, Ford, Volkswagen, General Motors, Toyota, Daimler and Tesla. It operates from a 50,000 square-foot facility in Windsor.

PRESS RELEASE

Mosaic Capital Completes Acquisition of Windsor-Based Circle 5 Tool & Mold

CALGARY, Nov. 1, 2017 /CNW/ – Mosaic Capital Corporation (“Mosaic”) (TSX-V Symbols: M and M.DB) is pleased to announce the acquisition of a 75% interest in the business being carried on by Circle 5 Tool & Mold Inc. (“Circle 5”).

Circle 5 is a supplier of molding solutions to Tier 1 automotive part manufacturers, offering custom, high-precision molds and tools for plastic injection production of highly-visible interior automotive components. Circle 5’s broad international customer base produces interior components for today’s leading automotive brands including BMW, Ford, Volkswagen, General Motors, Toyota, Daimler and Tesla. With an established track record of over 30 years, Circle 5 is highly regarded in the industry for its delivery of quality molds and tools based on strong customer responsiveness, innovation and collaboration. Circle 5 operates out of a modern, 50,000-sq. ft. manufacturing facility in Windsor, Ontario. The remaining 25% of Circle 5 is being retained by its President and primary operating shareholder, Saylo Lam (41), a professional mechanical engineer who has been involved with the company for over 18 years.

Mosaic’s acquisition cost of $27 million was funded by cash and will be subject to typical post-closing adjustments. Mosaic financed the transaction with $7 million from available credit facilities and $20 million from the issuance of three year, 7% subordinated preferred units within a newly formed limited partnership, which is 100% controlled by Mosaic.

Saylo Lam, President of Circle 5 stated “Mosaic’s involvement successfully solved a key ownership succession issue, which results in an orderly transition of Circle 5’s two founding shareholders, one of whom is my father. We are excited to move forward with the Mosaic team, as we collectively pursue a number of identified organic and acquisition growth opportunities.”

Mark Gardhouse, CEO of Mosaic Capital commented “we are delighted to welcome Saylo Lam and his management team at Circle 5 as Mosaic’s newest operating partner and we look forward to a long-term relationship. Circle 5 has an established track record of strong financial growth and profitability within a niche market that has an attractive outlook. This acquisition illustrates the diversified growth model we are implementing and offers a new business platform for future growth opportunities.”

ABOUT MOSAIC CAPITAL CORPORATION

Mosaic is a Canadian investment company that owns a portfolio of established businesses which span a diverse range of industries and geographies. Mosaic’s strategy is to create long-term value for its shareholders through accretive acquisitions, long-term portfolio ownership, sustained cash flows and organic portfolio growth. Mosaic achieves its objectives by maintaining financial discipline, acquiring businesses at attractive valuations, performing extensive acquisition due diligence, utilizing optimal transaction structuring and working closely with subsidiary businesses after acquisition.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information: Cam Deller, Vice President, Corporate Development, Mosaic Capital Corporation, 400, 2424 – 4th Street SW, Calgary, AB T2S 2T4, T: (403) 930-6576, E: cdeller@mosaiccapitalcorp.com

Photo courtesy of Reuters/Fred Thornhill