Monomoy Capital Partners, a New York private equity fund focused on value investing and business improvement in the smaller end of the middle market, has sold its portfolio company, SRC, to Buckingham Capital and Stelaris Capital.
Although financial terms of the transaction have not been disclosed, Monomoy received cash and securities that equate to a five times cash-on-cash return for its 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 specialised 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,” says 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.”
