Sentinel Capital Invests In Auto Center Franchise –

Sentinel Capital Partners in July acquired Cottman Transmission Systems, a franchiser of automotive transmission centers, in a transaction valued at $50 million. Equity for the deal came from Sentinel Capital Partners I, L.P. and Sentinel Capital Partners II, L.P. Managing Partner David Lobel and Principal Christopher Weiler declined to discuss the breakdown of the financing, but noted that senior debt was provided by Heller Financial and Antares Leveraged Capital Corp.

The acquisition of Fort Washington, Pa.-based Cottman Transmission brings Sentinel Capital’s franchise holdings to three-Cottman Transmission, rib-restaurant chain Tony Roma’s (BUYOUTS July 20, 1998, p. 10) and 86 Taco Bell restaurants in Minnesota (BUYOUTS Oct. 28, 1996, p. 7), Weiler said.

According to Weiler, auto-industry trends are fueling the growth of Cottman Transmission, which in turn sparked Sentinel’s interest. Some of the trends include the increased popularity of front-wheel and four-wheel-drive vehicles that employ more complex transmissions, the return of high-performance and high-output engines that place more strain on transmissions, and the greater use of computers in automobiles, making transmission repair more specialized and costly.

Weiler and Lobel declined to disclose Cottman Transmission’s annual revenue, but said the company has 264 centers, six of which are located in Canada.

Sentinel Capital Partners buys and builds middle-market companies in the U.S. and Canada with at least $4 million in revenue, investing up to $30 million in equity per transaction. In June, Sentinel’s Fund II closed on $126 million.