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- Success Stories
Henniges Automotive, Inc.
Vehicle sealing systems and anti-vibration products
Henniges was formed as a result of the combination of two competing vehicle sealing suppliers, Metzler North America and GDX Automotive. In September 2007, Wynnchurch acquired the North American operations of Metzeler from its distressed European parent. In December 2007, Wynnchurch acquired the majority of GDX Automotive – Wynnchurch purchased only the most promising assets of a distressed global holding company and negotiated favorable economic terms with all major customers. Upon closing the acquisition of GDX, Wynnchurch combined the two businesses under new leadership and created the number #1 supplier of vehicle sealing systems in North America and the #2 supplier globally under the name Henniges Automotive, Inc.
Individually, these two businesses faced numerous challenges. As a result of severe operational problems in Europe, Metzeler Automotive Profile Systems SA made the decision to divest all of its global businesses. The majority of the European operations were sold to Cooper-Standard, while Wynnchurch acquired Metzler’s North American operations. Separately, a large U.S. hedge fund had acquired GDX from GenCorp in June of 2004 and over the following years capitalized GDX with close to $400 million of capital. Unfortunately, GDX experienced a number of operational, financial and managerial issues that led to severe financial distress in 2007. These issues included: (i) an unusually large number of failed program launches, (ii) a high level of leadership turnover, (iii) a poorly priced book of business and (iv) disruptions in the work force as a result of unfavorable labor agreements. Wynnchurch acquired both Metzler NA and GDX, and renamed the combined entity Henniges Automotive.
Having successfully made a number of automotive platform acquisitions, Wynnchurch understood the combined entity’s strengths and challenges. Metzeler NA had developed strong operating and management systems, but lacked a strong growth engine and was facing declining future revenues. GDX, on the other hand, had a tremendous book of business, but lacked management systems. Following the successful combination of the two businesses, the combined Henniges rolled out best practices across the entire organization, focused on establishing and nurturing a culture of continuous improvement, and transformed itself into a customer focused world class supplier to the global automotive market. As a result, Henniges was well-positioned as a strong global competitor with a strong management team, diversified low cost manufacturing capabilities and exceptional engineering expertise.
The key to helping Henniges achieve its potential was putting the right team in place to lead the company. Wynnchurch did what it could to set the stage – creating the right structure, negotiating contracts with key OEM customers, improving union work rules and flexibility, prudently capitalizing the investment and shepherding two complex transactions to closing at attractive values. Our exceptional management team then took over, took advantage of the building blocks Wynnchurch put in place and drove the transformation of the business.
Revenues and profitability rose dramatically during the three years of our investment. During the first half of 2010 the Company retained Moelis, a leading investment bank, to explore strategic alternatives. In October of 2010, Wynnchurch agreed to sell the Company to a U.S. based private equity fund. The transaction closed on November 30, 2010. In connection with the sale of the Company, Wynnchurch negotiated the right to invest a reasonable amount of equity in the new holding company on the same terms as the buyer.
John Hatherly sums up Wynnchurch's success with Henniges succinctly: "We made sure that Henniges possessed tremendous potential from day one – but it took an exceptional leadership team to unleash that potential."