Blue Point Capital Partners Recaps Alco Manufacturing

Blue Point Capital Partners has recapitalized Elyria, Ohio-based Alco Manufacturing, a provider of close tolerance precision-machined steel components. Blue Point Capital Partners is a lower middle market private equity firm. KeyBank and Prudential Capital provided debt financing for the deal. Terms of the deal were not released.

Blue Point Capital Partners announced today that it has recapitalized Alco Manufacturing, LLC. Headquartered near Cleveland in Elyria, OH, Alco is the largest independent provider of close tolerance precision machined steel components used in high pressure fluid power applications.

Alco serves as a trusted business partner to the industry’s largest hydraulic equipment manufacturers (HEMs), providing market-leading OEMs with key components for motion control systems used on multimillion-dollar agricultural, mining, construction and mass transportation equipment final assemblies. The Company has developed a profitable business model with dedicated focus on its core competencies of quality and process control, which has afforded Alco its market-leading position and strong financial results over the last decade.

Blue Point Capital Partners is a lower middle market private equity firm that employs a regional sourcing strategy and typically recapitalizes businesses in partnership with management. Debt financing for the Alco transaction was provided by KeyBank and Prudential Capital.

“Alco is a great fit for us,” said Sean Ward, a partner with Blue Point. “We are confident that this will be a solid platform investment as we have partnered with a strong, local management team led by Kevin Koepp in a sector where we’ve experienced historical success. Additionally, we are enthusiastic about working again with metals industry veteran Bill Kowal while taking Alco into this next phase of growth and expansion.”

Kowal was previously the CEO of Metal Technology Solutions, a Blue Point investment realized in 2008 with the sale of BP Metals, and will serve as non-executive chairman of Alco.

“It became apparent early in our diligence that there are significant untapped organic growth opportunities for Alco to increase volume within existing product lines as HEMs continue to outsource these components, as well as to expand the business into other end-market applications,” said Kowal. “This deal is synergistic with Blue Point’s playbook of operational levers and capabilities, and I am pleased to work with the team again in what I anticipate will be another successful investment outcome.”

Koepp, who will continue as president and CEO of Alco, said, “We look forward to our partnership with Blue Point and believe that we are well positioned to grow and strengthen our business. Alco has a culture committed to continuous improvement and this partnership exemplifies our ongoing focus to provide best-in-class products and services to our customers.”

Founded in 1971, Alco has over 220 employees and produces more than 60 million components annually, supplying engineered steel machined products to the dominant players in the North American hydraulic products market. Alco is the preferred or sole-source supplier of the couplings, ferrules, sockets, sleeves, inserts and stems utilized by its customers as original and replacement parts in hydraulic systems worldwide. On average, the Company boasts 20-year relationships with its customers.

Blue Point Capital Partners (, with offices in Charlotte, Cleveland, Seattle and Shanghai, is one of the largest and most active resident middle market private equity firms in each of its target markets and focuses principally on investments in manufacturing, distribution and service businesses that primarily address commercial and industrial markets. Blue Point’s presence in the economies of both the United States and China positions the firm to create value by helping its investee firms to globalize. Blue Point has extensive experience in identifying, evaluating and successfully completing a variety of private equity investment transactions, including recapitalizations, management buyouts, corporate divestitures and industry consolidations. The principals of Blue Point have completed over 100 investments with a total transaction value of more than $2 billion.