Monomoy Capital Partners has closed the merger of two portfolio companies Escort Inc and Cobra Electronics Corp to launch Cedar Electronics Holdings Corp. No financial terms were disclosed although the deal allowed Cedar to pay a $41 million dividend to its shareholders. Cedar is a provider of branded consumer electronics for casual and professional drivers, boat owners and outdoor enthusiasts.
NEW YORK–(BUSINESS WIRE)–Monomoy Capital Partners (“Monomoy”), a New York private equity firm focused on deep value investing and business improvement, announced today that it has completed the merger of two portfolio companies, Escort Inc. (“Escort”) and Cobra Electronics Corp. (“Cobra”), to form Cedar Electronics Holdings Corp.(“Cedar”), an industry leader in branded consumer electronics for casual and professional drivers, boat owners and outdoor enthusiasts. The transaction created a substantial cash dividend payment for Monomoy Capital Partners II, L.P. (“Fund II”) and its investors.
Headquartered in West Chester, Ohio, Escort is the market leader in the design, manufacturing and distribution of premium ticket protection devices for both professional and amateur drivers. Escort sells radar detectors under the Escort, Passport and Beltronics brands through the Escort and Beltronics websites, Amazon, Best Buy and specialty retailers. Monomoy acquired Escort through Fund II in October of 2013, and Escort has since upgraded its senior management team, restructured operations, and re-focused the company on its core products and customer base.
Headquartered in Chicago, Illinois, Cobra designs, sources and distributes marine radios, two-way radios, citizen band radios, dash cams, radar detectors and other consumer electronics. The company’s products are sold under the Cobra brand name through big box retailers, truck stops and travel centers, e-retailers and specialty retailers. Monomoy acquired Cobra through Fund II in October of 2014 from its public shareholders, and Cobra has since improved profitability by streamlining product development, rebuilding its supply chain and distribution system, and improving product quality and customer satisfaction.
“Cedar brings together three leading American brands to create a diversified, highly-profitable consumer electronics platform with a dedicated customer base in cars, trucks, boats and hiking trails across North America,” said Justin Hillenbrand, a partner and Co-Chief Executive Officer of Monomoy. Cedar will continue to market its products under the Cobra, Escort, Passport and Beltronics brands and will focus on six core product categories: ticket protection, citizen band radios, marine radios, two-way radios dash cams and related accessories. Cedar is now the industry leader in the radar detection market at every price point and in every sales channel.
The combined business is now based at Escort’s current headquarters in West Chester, Ohio and employs over 350 team members worldwide. David Thornhill, formerly the senior executive of Escort, is now the Chief Executive Officer of Cedar. Sally Washlow, formerly the senior executive of Cobra, is now the President of Cedar. The Board of Directors of Cedar includes Bill Fields, former Chief Executive of Walmart North America; Tom Gebhardt, President of Panasonic Automotive Systems USA; and Clayton Albertson, formerly with the Blackstone Group.
“The Monomoy team has been the perfect partner for both Escort and Cobra,” said Mr. Thornhill. “Through strategic guidance and operational discipline, the Monomoy team has helped management transform both brands into profitable, thriving businesses over a period of months. As a healthy middle market company, Cedar is now positioned for strong growth among its enthusiast consumer base both organically and through future acquisitions. We are excited about the future.”
The combined Cedar business was financed with a senior credit facility provided by LBC Credit Partners III, L.P. and a mezzanine loan provided by Capitala Investment Advisors. The merger financing allowed Cedar to pay a $41 million dividend to its shareholders while maintaining what Monomoy believes to be a conservative capital structure and modest leverage. This transaction marks the twelfth liquidity event for Monomoy’s Fund II, a 2011 vintage private equity fund dedicated to deep value investing in the middle market. Houlihan Lokey L.P. acted as the financial advisor to Cedar in the transaction. Baker & McKenzie LLP and Kirkland & Ellis LLP provided legal counsel to both Cedar and Fund II.
About Monomoy Capital Partners
Monomoy Capital Partners is a private equity firm with over $1 billion in committed capital in a family of private equity funds that primarily make controlling investments in middle market businesses in manufacturing, distribution, consumer products and foodservice. Over the past ten years, Monomoy funds have closed over 40 middle market acquisitions, and their companies have produced over $2 billion in combined sales and employed more than 10,000 associates across four continents, from North America to Asia. Monomoy implements customized business improvement programs at its investments that reduce operating expenses, increase profitability and encourage growth. To learn more about Monomoy and Monomoy portfolio companies, please visit the firm’s website at www.mcpfunds.com.
About the Escort Product Line
Escort is the industry leader in high-performance ticket protection devices in North America with its premium-priced Passport product line, it value-price Beltronics radar detectors and its Escort Live app for iOS and Android systems. Escort’s Passport Max is the most technically sophisticated radar detection system in operation and consistently receives the highest awards from industry observers. Escort designs and manufactures many of its products in Ontario, Canada and is the leading seller of ticket detection products on Amazon. To learn more about the Escort product line, please visit the Escort website at www.escortradar.com.
About the Cobra Product Line
Cobra is a leading global designer and distributor of communication and navigation products, with a track record of delivering innovative and award-winning products. Cobra is a market leader in the two-way radio, radar detector and citizens band radio sectors. In addition, the company is a significant new player the marine radio market and has expanded many of its product lines into Europe. The Consumer Electronics Association, Forbes and Deloitte have all recognized Cobra for the company’s innovation and industry leadership. To learn more about the Cobra product line, please visit the Cobra website at www.cobra.com.