Breeze Industrial Products Corporation

TOP CALIBER CEO

Wind Point partnered with CEO Craig Stinson to acquire Breeze Industrial Products Corporation (“Breeze”). Prior to Breeze, Craig was President of the $4.8 billion Light Vehicle Systems Division at ArvinMeritor, an $8 billion global supplier of exhaust systems and ride control systems, and the third largest customer of Breeze. Craig was responsible for 18,000 employees in 63 facilities and drove 10% annual organic growth. Previously, Craig ran ArvinMeritor’s $1.8 billion Global Exhaust Business. In this role, he focused on developing new technologies and initiating joint ventures with Asian suppliers to expand the content per vehicle and global reach of the division. 

UNDER-MANAGED MIDDLE MARKET BUSINESS

Breeze, headquartered in Auburn Hills, Michigan, was a market leader in the supply of proprietary clamps and served the engineered hose clamp and exhaust components markets. Breeze supplied a wide variety of blue chip customers, including OEMs, tier-one suppliers, and distributors, from facilities in Auburn Hills, Saltsburg, Pennsylvania and Frittlingen, Germany. Breeze’s proprietary technology and constantly evolving product line allowed sustainable high profit margins. Wind Point acquired Breeze in 2004 for $137 million, or 6.9x TTM EBITDA.

Prior to Wind Point’s acquisition, Breeze had merged with an equally-sized business, Torca, and the combined company was still operating as two stand-alone divisions.  Few synergies between the two companies had been captured, and the management teams had not been integrated.

PATH TO VALUE CREATION

Wind Point and Craig Stinson identified the following path to value creation that was executed during Wind Point’s ownership:

• Develop new products and expand share.  Prior to Wind Point’s ownership, Breeze’s divisional sales and product development teams were not integrated, it lacked focus on customers based in North America and Western Europe, and it exercised minimal pricing leverage.  Under Wind Point’s ownership, Breeze added integrated sales and product development teams to leverage proprietary technology, addressed needs created by changes in heavy truck emissions by developing new products, increased sales outside North America by 17% annually by aligning with strong Asian OEMs, drove 13% annual revenue growth, and developed a pipeline of new products with $50 million of annual sales potential.

• Reduce labor through lean manufacturing.  Prior to Wind Point’s ownership, Breeze suffered from minimal deployment of lean manufacturing techniques at two of three facilities, had a poor record of on-time delivery and quality at its Saltsburg facility, and possessed redundant back office functions following Torca and Breeze merger. During Wind Point’s ownership, Breeze increased on time delivery by over 20% in Saltsburg, grew hourly headcount by less than one-fifth of sales growth by training all employees and managers in lean manufacturing and completing two kaizen events per facility each quarter, and integrated Breeze and Torca, resulting in greater efficiency and shared best practices.

• Achieve material cost reductions.  Prior to Wind Point’s ownership, Breeze had a purchasing function that was a low-level transaction processing group, no history of supplier cost reductions, and no consolidated purchases between Breeze and Torca. Under Wind Point’s ownership, Breeze created professional strategic sourcing competency, leveraged purchasing power across all three facilities to secure over $3 million in savings, and protected margins despite significant run-ups in raw material costs through surcharge recovery programs and the pass-through of price increases.

• Reduce working capital.  Prior to Wind Point’s ownership, Breeze had excess inventory in Saltsburg and Frittlingen, and lacked control over part number proliferation.  Under Wind Point’s ownership, Breeze implemented lean manufacturing training and conducted kaizen workshops and improved inventory turns from 7.0x to 9.3x.

COMPANY FINANCIAL RESULTS

Wind Point grew revenue by 37% and EBITDA by 36% during ownership.