SRC, which backed by Monomoy Capital Partners, has been sold to Buckingham Capital and Stelaris Capital. Financial terms weren’t announced but Monomoy said the sale generated a five times cash-on-cash return. Cleveland-based SRC produces fused magnesium flux, which is used in the production and recycling of magnesium and aluminum alloys. Monomoy is a New York PE firm.
Monomoy Capital Partners, L.P., (“Monomoy”) a New York private equity fund focused on value investing and business improvement in the smaller end of the middle market, announced today that it has sold its portfolio company, SRC, Inc. (“SRC” or the “Company”), to Buckingham Capital, LLC (“Buckingham”) and Stelaris Capital, L.P. (“Stelaris”).
Although financial terms of the transaction were not disclosed, Monomoy received cash and securities that produce a five times cash-on-cash return for Monomoy’s debut restructuring fund.
SRC is the world’s leading producer of fused magnesium flux, a critical chemical component in the production and recycling of magnesium and aluminum alloys. The Company’s fluxes are critical components in the production, casting and recycling of magnesium and magnesium alloys, and SRC’s magnesium chloride is used in a variety of industrial and other applications, including desiccants and the manufacture of specialized catalysts.
With facilities in Cleveland, Ohio and Albany, Oregon, SRC was originally a non-core division of Compass Automotive Group, a Tier 1 automotive supplier and a Monomoy portfolio company. Monomoy spun off SRC into a standalone portfolio company in 2009 at the height of the automotive crisis. Since creating the company in 2009, Monomoy has worked closely with SRC’s management team to implement operational improvements and drive significant volume growth.
“The sale of SRC to Buckingham and Stelaris represents the next logical step in the evolution of the company,” said Justin Hillenbrand, Partner at Monomoy Capital. “Over the past two years, we have been successful in implementing initiatives to reduce SRC’s operating costs, improve inventory management and increase overall sales growth. This transaction, coupled with the company’s strong relationships with some of the industry’s largest suppliers and customers, leave SRC well positioned for continued growth in the future.”
“We would like to thank Bill Strohlein, SRC’s Chief Executive Officer, and the employees of the company for their hard work and dedication throughout this process,” said Mr. Hillenbrand. “We’ve enjoyed working with the entire SRC team and are delighted with the outcome of our partnership with them.”
About Monomoy Capital Partners, L.P.
With over $700 million in assets under management, Monomoy Capital Partners is a private equity firm that makes controlling investments in middle market companies. The Fund has completed 31 transactions in the smaller end of the middle market over the past five years and currently owns 10 businesses that collectively employ more than 4,000 people. Monomoy implements customized business improvement programs in all portfolio companies that reduce operating expenses, increase profitability and encourage profitable growth. For additional information on Monomoy and its portfolio companies, please visit www.mcpfunds.com.