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Engineered Products & Components Investment Thesis

MCM Capital Partners is seeking companies manufacturing and distributing engineered products and components. The following are reasons why we are interested in the industry, characteristics of attractive companies for investment and our experience and value-add regarding engineered products and components.

Favorable Industry Trends & Characteristics

  • Niche products with unique performance enhancing characteristics serving critical applications enjoy higher than average profit margins and higher customer loyalty
  • Companies serving the Aerospace, Military & Defense, Power & Energy, Medical, Biopharma, and/or Semiconductor markets are attractive due to their long-term growth potential
  • Significant barriers to entry exist due to industry regulations in certain markets
  • Large breadth of services and vertically integrated companies will benefit from OEM’s reducing their supplier base
  • Highly fragmented industry with many small manufacturers allows for a “buy and build” strategy

Seeking Engineered Component Companies with these Characteristics

  • Sales $15-$50 million and/or EBITDA $2-$8 million
  • Gross Margins: Manufacturers +30% or Value-Added Distributors +20%
  • Industry Certifications are attractive: ISO 13485, AS9100, ISO 16949, and/or ITAR
  • Low-volume, high-mix runs maintaining tight tolerance and high precision
  • Companies serving corrosive, harsh, and/or critical environments
  • Companies providing engineered and value-added solutions
  • Attractive products, markets, and applications include: motion control, fluid power/handling, engines, seals, valves, filters, fittings, medical devices, measurement and control instruments, etc.

 

MCM’s Engineered Components Experience

We leverage our successful portfolio company experiences, MCM board members’ engineered components experience, and relationships with industry executives.

PPL Black_186Performance Plastics, performanceplastics.com, acquired in 2015, is a niche, technical custom injection molder focused on demanding jobs utilizing high performance plastics manufacturing tight tolerance and high precision parts. It serves the Medical, Military & Defense, Aerospace, and Energy markets.

RMB logoRMB Products, rmbproducts.com, acquired in 2010, is a rotational molder and laser sinterer of engineered products for niche applications serving Biopharma, Semiconductor, Aerospace, and Chemical Processing.

Dexmet logoDexmet, dexmet.com, divested in 2011, manufactures precision expanded metals, foils and thermoplastics with exacting mechanical and electrical properties to meet tight conductivity, weight and dimensional tolerances.

microgroup-logoMicroGroup, microgroup.com, divested in 2005, is a value-added manufacturer and distributor of small diameter stainless steel and alloy tubing, providing precision metal fabrications to Medical and Life Science OEMs.

AspexAspex, aspex.com, manufacturers proprietary analytical instruments sold into a number of industrial end markets, including: semi-conduction, steel fabrication, textiles and pulp/paper. The Company has developed many application-specific software packages that automate certain highly repetitive, time-consuming tasks.

MCM Senior Operating Partners Mr. Harry Shimp (Harry’s bio here) and Mr. Greg Ott (Greg’s bio here), both degreed mechanical engineers, have operated many highly technical component manufacturers.

MCM Board Advisor, Mr. William Carson, Jr. (Bill’s bio here) is President of Cutting Dynamics, a company manufacturing highly engineered metals and composites. He grew the company from 3 employees in 1985 to over 140 employees today.

MCM has close relationships with Swagelok executives (, a +$1 billion, privately-held, developer and manufacturer of highly engineered fluid system products.

MCM professionals attend tradeshows to further our industry knowledge, including:

  • MD&M: Medical Design & Manufacturing
  • MAPP: Manufacturers Association for Plastic Processors
  • CAMX: The Composites and Advanced Materials Expo
  • SAMPE: Society for the Advancement of Material and Process Engineering
  • NACE: National Association of Corrosion Engineers
  • ADM: Advanced Design & Manufacturing
  • Design2Part