New York, NY (May 17, 2006) -- KPS Special Situations Funds ("KPS") announced today that a newly formed affiliate has acquired a controlling equity interest in Cloyes Gear and Products, Inc. ("Cloyes"). Financial terms of the transaction were not disclosed.
Headquartered in Ft. Smith, Arkansas, Cloyes (www.cloyes.com) is a leading supplier of timing systems and components for automotive engines and enjoys a dominant market position in the North American automotive aftermarket under the Cloyes® and Dynagear® brand names. Cloyes is one of only four global suppliers that provides customers with the design, engineering, manufacturing and supply chain management for the timing system in engines. Cloyes is also one of the few global suppliers that has demonstrated the expertise required to manufacture components used in growing markets for variable valve timing technology. The Company operates four manufacturing facilities in the United States, a manufacturing joint venture in Germany (Cloyes Europe GmbH), and three distribution/system assembly facilities in North America.
KPS will invest substantial capital in Cloyes to fund growth opportunities. Cloyes' previous owners have retained a minority ownership interest in the Company, and Trevor Myers will continue to serve as Chief Executive Officer under KPS' ownership. Mr. Myers and his management team will implement a business plan developed in partnership with KPS focused on improving operations and investing in select return-driven capital improvement projects.
Raquel Vargas Palmer, Principal of KPS, said "Trevor Myers and his team have built an extremely impressive business. Cloyes has led the trend in fuel efficient timing drive systems, formed global strategic relationships, and constantly evolved to better serve its customers. We look forward to building the Company through new business initiatives and acquisitions."
Mr. Myers said, "As a family-owned business, it was important for us to find the right partner - one that would support Cloyes' growth and dedication to quality and innovative products. KPS was an obvious choice given its commitment to manufacturing excellence, its successful investment track record, and its experience in investing in the automotive sector. Our customers can expect that we will continue to provide innovative technology along with world class products and service."
Financing for this transaction was provided by LaSalle Business Credit, LLC.
About KPS Capital Partners
KPS, through its affiliated management entities, is the manager of the KPS Special Situations Funds, a family of investment funds with approximately $21.8 billion of assets under management (as of June 30, 2024). For nearly three decades, the Partners of KPS have worked exclusively to realize significant capital appreciation by making controlling equity investments in manufacturing and industrial companies across a diverse array of industries, including basic materials, branded consumer, healthcare and luxury products, automotive parts, capital equipment and general manufacturing. KPS creates value for its investors by working constructively with talented management teams to make businesses better, and generates investment returns by structurally improving the strategic position, competitiveness and profitability of its portfolio companies, rather than primarily relying on financial leverage. The KPS Funds’ portfolio companies generate aggregate annual revenues of approximately $19.3 billion, operate 219 manufacturing facilities in 26 countries, and have approximately 47,000 employees, directly and through joint ventures worldwide (as of June 30, 2024). The KPS investment strategy and portfolio companies are described in detail at www.kpsfund.com.
KPS Mid-Cap focuses on investments in the lower end of the middle market that require up to $200 million of initial equity capital. KPS Mid-Cap targets the same type of investment opportunities and utilizes the same investment strategy that KPS’ flagship funds have for nearly three decades. KPS Mid-Cap leverages and benefits from KPS’ global platform, reputation, track record, infrastructure, best practices, knowledge and experience. The KPS Mid-Cap investment team is managed by Partners Pierre de Villeméjane and Ryan Harrison, who lead a team of experienced and talented professionals.
