Closings follow two earlier successful transactions in 2006; three deals cite uncommon target buyer selection strategies
Aurora, IL August 10, 2006: Sikich LLP Investment Banking Division was the financial advisor to Mt. Pulaski Products, Inc, an agricultural processor based in Mt. Pulaski, Illinois, which was purchased in July by W-H Energy Services, Inc., a Houston-based NYSE listed company providing products and services for drilling, completion, and production of oil and natural gas wells. Sikich was also the financial advisor to Whitley Products, Inc., a manufacturer of fabricated precision tubular products, based in Pierceton Indiana, which sold the same month to TMB Industries, a private equity group whose focus is automotive and industrial manufacturers with sales between $30 and $500 million.
Mt. Pulaski is a leading corncob processor with two plants in Mt. Pulaski, Illinois and Skelton, Illinois. The company processes corncobs for use as industrial absorbents, abrasives, chemical and pharmaceutical carriers, and animal bedding. The CEO of Mt. Pulaski, Scott Steinfort, will remain as CEO. The highest priority target buyers for Sikich were companies outside the industry that had a strategic fit with Mt. Pulaski. Sikich has found this type of buyer typically pays the highest price and usually provides the best post-closing environment for the company’s management and employees. W-H Energy met the criteria for a strategic fit buyer. A subsidiary of W-H Energy has two plants using similar manufacturing processes to those used by Mt. Pulaski, but its products are sold to the petroleum industry. More importantly, the purchase of Mt. Pulaski enables W-H Energy to look to the future when corncob processing may play a significant role in solving worldwide industrial, environmental, and energy problems.
Whitley Products is a major manufacturer of tubular products serving the diesel engine, agricultural and off-highway industries. The company has offices in Pierceton, Indiana and two plants in Plymouth, Indiana and Franklin, North Carolina. Randy Lowe, the CEO of Whitley Products, will remain as CEO and retain ownership in the company. In this instance the highest priority for Sikich in selecting target buyers were those companies and private equity groups that used low cost country sources, but worked to keep manufacturing plants in the U.S. TMB met that criterion.
Sikich was also the financial advisor to eServ, LLC, a leading product engineering business process outsourcing (BPO) firm based in Peoria, Illinois, which was purchased in March ‘06 by another NYSE listed company, Perot Systems, a technology and healthcare (BPO) outsourcing company headquartered in Plano, Texas. As with Mt. Pulaski Products, the top priority target buyers for Sikich were those companies that were strategic to eServ, but outside the industry. This strategy again worked well with the highest bids coming from Asian and American strategic companies not involved in engineering. The fourth transaction involved a Virginia structural engineering firm acquired by a similar company in Colorado.