The Turnaround of a Leading Infrastructure Company
“US Pipe is a great example of how Wynnchurch works in partnership with management to transform and revitalize businesses.”– Christopher O’Brien, Managing Partner, Wynnchurch
Prior to our involvement, Birmingham, Alabama-based U.S. Pipe was a major manufacturer of ductile iron pipe products, fittings and joint restraints for water distribution and water management applications. Founded in 1899, the company was well established as a market leader, offering a comprehensive product portfolio supported by superior quality, capabilities, innovation and service. U.S. Pipe served a diverse group of customers, including distributors, contractors and municipalities.
An Underperforming Non-Core Asset
U.S. Pipe was a non-core division of Mueller Water Products that was suffering from a lack of strategic direction while facing a perfect storm of challenges: the effects of a severe downturn in the U.S. housing market and cuts in municipal infrastructure spending in 2008/2009; operational challenges that led to lower on-time delivery rates and higher costs; and a volatile steel price environment.
Durable Strengths In Spite Of Challenges
Even as it struggled, U.S. Pipe remained the number-one player in the ductile iron pipe market for water infrastructure. The company had a 100-plus year history, the strongest brand in the industry, and the broadest portfolio of pipe, fittings and joint restraints. Its market leadership position enabled U.S. Pipe to benefit from the recovery of residential construction and significant public investment required to upgrade the nation’s water infrastructure.
Partnering To Drive The Turnaround
Wynnchurch acquired U.S. Pipe in a carve-out transaction in 2012, seeing opportunity in the company’s leadership position, the expected improvement of market conditions, and addressable strategic, commercial and operational issues. We provided support for the U.S. Pipe management team as it increased its investments in people, SG&A and capital equipment while maintaining an unwavering focus on its customers and product offerings.
The U.S. Pipe team refocused its sales efforts across the country, partnering with its distributors to regain lost share and create a more strategic geographic footprint. To drive operational improvement, management brought an intense focus on implementing core manufacturing metrics, lean manufacturing principles and automation that ultimately established U.S. Pipe as the industry’s low-cost producer.
Creating Value Through Acquisition
As it improved operations, U.S. Pipe and Wynnchurch worked together to create value through five highly strategic and synergistic acquisitions that expanded manufacturing operations, broadened the product portfolio and vertically integrated the supply chain to improve margins.
From Negative To Positive
As a result of Wynnchurch’s and management’s efforts, U.S. Pipe experienced a substantial turnaround from negative earnings, realizing a significant increase in EBITDA. U.S. Pipe was sold to Forterra Building Products, an infrastructure and water management products and solutions company, in April 2016.