Published in Manufacturing

Indiana PE firm acquires sheet metal fabricator C.N.C. Products of Niles

BY Wednesday, May 01, 2019 08:00am

NILES — C.N.C. Products LLC, a Southwest Michigan sheet metal fabricator, has been acquired by Indiana-based private equity firm Parker Holding Inc.

C.N.C. Products was started in 1987 by Fritz Knauf, along with his brother-in-law, and has since been family-owned by Knauf Holdings LLC.

After decades of building the company, Knauf was ready to retire but didn’t have a successor. That’s when Parker Holding came in.

“Generally what we do is we look at businesses like the small- to medium-sized businesses with an owner looking to exit, but with really no either succession plan or a successor in the wings,” Gerri Davis-Parker, president and CEO of Parker Holding, told MiBiz. “A lot of them are family-owned businesses, similar to this. Fritz has owned this place for 30 years and really doesn’t have anybody who wanted to take it over, family or non-family.”

Parker Holding aims to improve efficiency and profitability while growing the market share of each acquisition, but the company focuses on “keeping long-standing employee teams together,” according to Davis-Parker.

As part of Parker Holding, the employees of C.N.C. Products will receive improved benefits from being part of a larger entity, like better health care plans and 401(k) plans, but with “as little disruption as possible,” she said.

“A lot of these people have been together for many years with these employers,” she said. “That’s just kind of a niche that we have found that we like, and that’s what we do.”

Parker Holding owns eight small companies, mostly in Indiana. The deal with C.N.C. Products marks the company’s first acquisition in Michigan.

“We’re excited about the opportunity here,” Davis-Parker said. “It’s always fun to start a new project with people who are as loyal and dedicated as this group we have here.”

Davis-Parker did not disclose the terms of the deal, which she described as an asset acquisition.

Advisers on the deal included Grand Rapids-based business brokerage firm Calder Capital LLC, Barnes & Thornburg LLP’s South Bend office, and Michigan City, Ind.-based CLH, CPAs & Consultants.

According to a recent study from the Great Cities Institute at the University of Illinois-Chicago, three-quarters of all family-owned manufacturing companies in the region are operated by someone older than age 55, and of these companies, roughly half do not have a succession plan, as MiBiz previously reported.

Davis-Parker, who has been “on both sides” of selling family-owned businesses, including the one started by her grandfather, said many manufacturers without a plan still do not want to see their business torn apart or disassembled.

“I understand not only the overall stress, but sometimes the emotional pain that comes with selling something you’ve spent your life building,” she said. “We try to be very sympathetic to that and understanding about that in the transaction process, because it is something that people generally only do once in their life. And it’s a struggle, often.”

Although the Parker Holding platform includes a couple of “quirky things,” Davis-Parker said just one Midwestern industry consistently holds the company’s attention.

“We like manufacturing. We like people who make things. It makes us feel good,” she said. “We don’t have anything in the medical field, we don’t have anything in the tech field — that’s not what we do. We stay in this very blue collar market, and we like it there.”

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