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Blackford acquires Hastings-based Quality Aluminum Products

BY Monday, January 25, 2016 05:09am

HASTINGS — Blackford Capital’s latest acquisition makes a “classic” fit for the private equity firm’s fund that invests in Michigan manufacturers.

Quality Aluminum Products Inc. — a maker of siding, gutters, roof edging and other exterior products for the residential housing industry — became the seventh portfolio company for the Grand Rapids-based Blackford Capital’s Michigan Prosperity Fund.

Founded in 1990, the third-generation Quality Aluminum Products has averaged a 20-percent growth rate the last few years and expects growth of 30 percent in 2016, said Blackford Capital Managing Director Martin Stein.

The company, with production facilities in Hastings and Flat Rock, specializes in lower-volume runs producing specialized products, Stein said. Quality Aluminum sells to contractors and suppliers in states around the Midwest.

Blackford Capital wants to extend the company’s market into states in the Plains, Southeast and Mid-Atlantic regions.

“They’ve just been on fire. They’ve been growing like crazy, very profitably. So it’s a very, very solid business,” Stein said. “It would be our desire to take them national.”

The third-generation former owners of the business — brothers Mike, Bob and Eric Clark — stayed with the company and the family retained a 30 percent stake, Stein said. Mike Clark continues as company president.

Quality Aluminum employs 80 people between its main production site in Hastings and the smaller facility in Flat Rock. Annual sales for the company haven been “fast approaching” $50 million, Stein said

Terms of the transaction, which closed Jan. 8, were not disclosed.

“We already have tremendous range as a company, and our plans for expansion outside of the Midwest will only contribute to our depth,” Mike Clark said. “Working with Blackford, we plan to continue our positive momentum as they provide our team with the right resources and talent to expand our reach and take our business to the next level of performance and growth.”

Launched in 2012, Blackford Capital’s Michigan Prosperity Fund targets mature manufacturing companies based in the state. Typically, the companies generate $20 million to $100 million in annual revenues and have had three consecutive years of profitability and a potential for high growth. The fund looks for companies whose owners want to sell but will stay on after the transaction to continue to manage the business.

The fund most recently closed in December on the acquisition of Grand Equipment in Hudsonville, a family-owned distributor and rental company for heavy equipment. The private equity firm also acquired Dickinson Press Inc. last August, a 130-year-old maker of books and printed materials for religious, education and business markets.

The Michigan Prosperity Fund has one more deal in the works that could close within a month, Stein said.

As it’s worked on those deals, Blackford Capital has been working to secure investors for a subsequent $100 million to $150 million Michigan Prosperity Fund II that will have the same investment focus.

Early approaches to investors, including large institutional investors in and outside of Michigan, have been positive, Stein said. Helping Blackford Capital’s case has been strong sales and earnings growth for its portfolio companies, some of which had record years in 2015.

“It’s looking good,” Stein said of the fundraising for Fund II. “We have a lot of interest from a number of limited partners within the state as well as we’re talking with a lot of them nationally. The regional approach and the success that we’ve had with our existing portfolio companies are very, very compelling.”

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