Private investment firm Blackford Capital LLC recently acquired Grand Rapids-based manufacturer Custom Profile Inc. for an undisclosed sum with an eye on adding 25 to 30 new jobs to its current work force of 165 within the next three years.
Custom Profile is the first company in Blackford’s Michigan equity investment fund, with the dual intent of generating equity returns for its investors in Michigan and supporting the local economy by protecting existing jobs and creating new positions, according to Martin Stein, founder and managing director of Blackford Capital, which acquires, manages and builds middle-market manufacturing, distribution and service companies.
“We invest in profitable companies that have a long history and track record of success, and we have been looking for the right manufacturing companies,” said Stein. “Custom Profile fit perfectly. It’s been around for 20 years and has tremendous management. We saw a tremendous future and a great partner to help them grow their organization’s sustainability.”
Founded in 1992, Custom Profile manufactures plastic profile extruded products primarily for the office furniture, appliance and point-of-purchase end markets. The company has flexible manufacturing capabilities with the ability to satisfy a variety of customer demand requirements from its headquarters in Grand Rapids and a manufacturing facility in Juarez, Mexico. The company’s primary customers include Herman Miller, Haworth, Steelcase, Electrolux and Whirlpool.
There are no plans to relocate or eliminate staff at its Grand Rapids locale, but two extruded plastics production lines already have been added to its 150,000-square-foot production facility at 2535 Waldorf Court NW.
“It’s not our intention at all to lay off current employees,” said Stein. “Our goal is to grow the organization and grow it aggressively.”
Stein said plans for expanding Custom Profile’s market share include reaching out to its existing customer base, garnering new customers and expanding into new industries.
“We believe in expanding (the business) as well as geographically with new properties and growth through other acquisitions with other companies,” said Stein. “We refer to them as add-on companies we would integrate to Custom Profile.”
Stein said he envisions within the next two to three years adding 25 to 30 new positions to Custom Profile’s current labor force of 165, with positions that would include manufacturing and quality engineers, shipping and receiving jobs and sales associates.
Plans include keeping Custom Profile in its current Grand Rapids location without expanding its facility.
“I’m the founder of Blackford Capital and originally from Grand Rapids, and Blackford’s been in existence for 12 years,” said Stein. “We relocated from southern California to western Michigan so we could reinvest in West Michigan companies.”
Blackford Capital reviewed about 6,500 potential transactions last year with the goal of closing four to six deals per year. Blackford has closed 25 transactions in the past five years. Custom Profile is Blackford’s seventh portfolio company.
Blackford’s investment criteria include mature, profitable businesses with revenues between $20 million and $100 million that have management teams either willing to remain with the company or seeking to retire or exit.
Stein said he was drawn to Custom Profile’s advanced engineering and tooling capabilities, its efficient operations and its strong management team. He added the company has consistently exhibited yearly growth in revenue and earnings in 18 of its 20 years in operation.
Blackford Capital intends to implement a board of directors and employ two operating partners to help with the transition of the management team and growth of the business. Sam Nicholas will remain as Custom Profile’s president and CEO, as will the rest of the company’s management team.
Custom Profile’s board of directors will include: Larry Miller, CEO, Kent Design; Brett Bolt, president/COO, Nexion; Jack Kolodny, Blackford operating partner and board member at various portfolio companies; Bill Boer, president, Grey Dunes; Terry O’Rourke, president, Aspen Surgical; Jeff Helminski, vice president, Campus Village Communities; John Mason, managing partner, Convergent Capital Partners; Thomas Loszer, board member, Looser Holding; Nicholas of Custom Profile; and Stein of Blackford Capital.