Exited Portfolio Companies - AxleTech International, Inc.
AxleTech International, Inc. Specialty vehicle drivetrain systems and components
BUSINESS: Troy, MI-based maker of heavy-duty axles, brakes and assorted after-market parts.
TRANSACTION: Bought by Wynnchurch from ArvinMeritor, Inc., in late 2002, after more than a year of due diligence analysis and extensive negotiation.
CHALLENGE: AxleTech was not a core asset for ArvinMeritor and had been for sale for several years. The business was unprofitable, its revenues had declined by $100 million over the preceding four years and there were union issues.
OPPORTUNITY: AxleTech's intellectual property, primarily its axle designs, were promising, and its products were integral to a number of vehicles. As a corporate orphan, the AxleTech platform provided a significant opportunity for both top line growth and operational improvements.
STRATEGY: Wynnchurch provided the full breadth of the firm's resources to support AxleTech's CEO, Mary Petrovich as she led a transformation of the company's cost structure and instituted best practices for global procurement. We also helped provide the contacts for aggressive pursuit of new business opportunities in the aftermarket sector, as well as the military market.
RESULT: Revenues and profitability rose dramatically during the three years of our investment. In September 2005, AxleTech was sold for $341 million.