GRAND RAPIDS — After nearly doubling the business over the last two and a half years, the private equity owners of Action Fabricators Inc. decided the market timing was right to find a partner to take the company to the next level.
Last fall, the private equity firm River Associates Investments LLC of Chattanooga, Tenn. started the process of selling Grand Rapids-based Action Fabricators, a diversified manufacturer serving the automotive and medical device industries.
“As the market is today, the returns are there and it’s the right timing to sell a business,” said Jon Rudolph, Action’s president and CEO.
The sale process generated interest from “10s of companies,” both prospective private equity and strategic buyers. It ultimately culminated a month ago in a deal with Modesto, Calif.-based Boyd Corp., a global provider of thermal management and environmental sealing solutions to the electronics, mobile computing and medical technology industries, among others.
Terms of the deal, which was announced publicly this week, were not disclosed.
The sale came about after Action Fabricators, a manufacturer of adhesive-backed products, grew revenues from around $45 million in 2015 to nearly $80 million at the time of the sale. Under private equity ownership, Action shifted its industry focus from three-quarters automotive to about 50 percent automotive, 40 percent medical device in a move to create more value and develop a portfolio approach, Rudolph said.
The company also became acquisitive, buying up three medical device companies in a two-and-a-half year span. Action would eventually move its Laminin Medical division, which launched in Grand Rapids, to a plant it acquired in Tennessee.
Action recently completed a 35,000-square-foot addition to its East Paris Avenue plant in Grand Rapids, bringing it to 110,000 square feet, with room to grow to about 200,000 square feet, according to Rudolph.
The West Michigan operations generate about $50 million of business, Rudolph said, noting the deal with Boyd should allow for more growth in the years ahead.
“We’re investing in people and equipment and processes to really grow the business in West Michigan and really cement the foothold here long term,” he said.
The move gets Boyd an entry into the U.S. automotive and medical device industries. Currently, half of the company’s business comes from foreign customers. Boyd, a portfolio company of San Francisco-based Genstar Capital, now employs 5,200 people.
“The business is highly complementary to our manufacturing competencies, customers, regions, markets, values and approach to business,” Boyd Corp. CEO Mitch Aiello said in a statement. “Jon Rudolph and his team at Action have executed well in developing a strong and scalable business in the strategically important and dynamic end markets of automotive and medical solutions.”
With the Action acquisition, Boyd expects to become about a $1 billion business, said Rudolph, who will remain with the company after the deal along with the rest of the local management team.
“It’s a great fit for all of our employees long term and will help us service the customers we have here,” he said.
Action Fabricators will keep its name and function as a division of Boyd Corp.
“It’s just a partnership with a new company out of California,” Rudolph said of the deal. “We’ll invest heavily in people and personnel and equipment and really keep driving the business. Everybody stays — there’s no thought of moving any of the business. We just want to grow the business here in West Michigan and provide jobs and security for families long term.”
Milwaukee, Wis.-based Robert W. Baird & Co. represented Action Fabricators in the deal.