Specialty Powertrain Products

Helping a Corporate Orphan Realize Its Potential

“Our role was to support AxleTech management with the capital, discipline, accountability and vision needed to help them turn their plan into reality.”

– John Hatherly, Managing Partner, Wynnchurch

When we first heard about the opportunity to invest in this Troy, MI-based maker of heavy-duty axles and other components, AxleTech was a troubled subsidiary of automotive industry leader ArvinMeritor. In fact, after seeing revenues decline by nearly $100 million in the four years prior to our investment, AxleTech had been essentially orphaned by its parent company and had been for sale for two of those four years, with no takers.

In AxleTech we saw a company with valuable intellectual property and products that were integral to a number of military, agricultural, construction and material handling vehicles. Wynnchurch managing partner John Hatherly led nearly a year’s worth of due diligence and negotiations before we completed the purchase from ArvinMeritor.

A New Leader to Make the Tough Calls

This was a company that needed a dramatic overhaul, and it needed leadership with the vision and fortitude to make the difficult decisions required to plan and implement major change. We hired experienced automotive executive Mary Petrovich as CEO and gave her the full breadth of our firm’s resources to help develop and execute the turnaround plan.

She led the transformation of AxleTech’s cost structure through a range of initiatives in global procurement and aftermarket products, and partnered with the UAW to implement a more realistic wage and benefit structure. Meanwhile, we provided the contacts to enable the aggressive pursuit of a strategy to grow AxleTech’s presence in the defense industry, and supported expansion into the aftermarket segment.

After Three Years, Success and Sale

Under Petrovich’s leadership, the turnaround gained traction and delivered results, and after three years, we sold the company to another leading private equity firm. At the time of sale, revenues and profitability had risen dramatically. The company had nearly 450 employees and a global manufacturing footprint with facilities in the United States, France and Brazil. The business was diversified and thriving, having developed a strong position in key military and aftermarket segments, and was poised for the next phase of growth and development.