Case Studies

In June 2003, Windjammer invested $25 million in a combination of subordinated debt, preferred stock and common stock to support the acquisition of Mettis Orthopedic Group by Olympus Partners through its portfolio company, Symmetry Medical Inc.  Symmetry is the world’s largest manufacturer and supplier of surgical instruments, customized delivery case systems, and implant components to the rapidly growing orthopedic reconstructive market.  The acquisition of Mettis more than doubled Symmetry’s size and expanded its product offering beyond surgical instruments and cases, to include implant components.  The expansion solidified Symmetry’s position as the leading single source provider to all of the major orthopedic OEMs.  As a result Symmetry has been able to increase its share of the market and benefit from the ongoing trend amongst OEMs to increase outsourcing of these product categories.  Symmetry completed an initial public offering in December 2004 (NYSE: SMA) and a secondary offering in July 2005.

Windjammer made an initial $15 million investment in Maxcess in October 2004 as part of a recapitalization to optimize the company’s capital structure and position the company for future growth. Maxcess is a global market leader in providing highly engineered, mission critical parts used in web process manufacturing applications. The company manufactures equipment in the United States and Europe and has the broadest product line in the industry including web guiding systems (sold under the Fife brand name), slitting systems and products (Tidland) and tension control products (MagPowr). Subsequent to its initial investment, Windjammer partnered with the management team and an existing investor in the company in August 2005 to acquire control of the business. The new ownership group has introduced a number of strategic initiatives to further strengthen Maxcess’ leading market position. Additionally, given the small niche markets in which the company operates, an acquisition program has been established to identify and pursue complementary properties.

 In October 2003, Windjammer invested $10 million in redeemable preferred stock to support RFE Investment Partners' acquisition of the company. McKenzie is the leading manufacturer, designer and catalog marketer of taxidermy forms and supplies, which are sold to over 22,000 taxidermists nationwide. Our investment provided RFE the capital it required to complete the acquisition, but more importantly enabled RFE to increase its total return as our preferred was structured with PIK dividends and warrants, which ultimately reduced RFE’s overall equity dilution. McKenzie’s capital structure also included senior debt and subordinated debt. Windjammer serves as a member of McKenzie’s board of directors and has continually supported the company’s organic and acquisition related growth efforts. Since the original investment, McKenzie has acquired four add-on taxidermy forms and supplies businesses, which enabled the company to further increase its number one market share position throughout the country.

In April 2005, Windjammer invested a combination of subordinated debt, redeemable preferred stock and common stock to support Gridiron Capital Partners' acquisition of the company. Schutt is a leading provider of helmets, face guards and other protective equipment used in the team sports of football, baseball and softball. Its products are sold directly to coaches and athletic directors through a network of team dealers that sell to colleges, high schools and youth programs throughout the country. At the time of the acquisition, Gridiron was in the fund raising process and had yet to have a first close. Windjammer, along with Schutt’s senior lender, provided the bulk of the capital necessary to complete the transaction, but we were able to structure the transaction, particularly our preferred stock, which had PIK dividends and warrants, to minimize Gridiron’s equity dilution and enable them to maintain a control equity position. In September 2005, Windjammer invested a similar combination of subordinated debt, redeemable preferred stock and common stock to support the company’s acquisition of Circle Systems, Inc., which was the largest independent reconditioner of helmets, protective equipment and apparel for high schools colleges and youth programs involved in the team sports of football, baseball, softball and several other sport programs. As a significant capital partner to Schutt, and as a member of the company’s board of directors, we continue to evaluate acquisition and other growth opportunities and are prepared to support the company as additional financing needs arise.

In September 2002, Windjammer invested $17.5 million in subordinated debt and convertible preferred stock to support a strategic acquisition. In December of 2004, Windjammer provided an additional $13.1 million of financing to support the Company’s acquisition of Joslyn Manufacturing Company from Danaher Corporation. MacLean Power Systems (MPS) is a Chicago-based family-owned business that manufactures specialty electrical hardware and insulator components for the electrical utility industry. The Company’s products are primarily utilized in power transmission and distribution systems on a worldwide basis. Our initial investment in the Company incorporated a very flexible capital structure that addressed the needs of the Company and family shareholders. As a member of the board of directors, Windjammer has been a strong proponent of growth through both internal initiatives and strategic acquisitions and we have worked closely with management in the evaluation of acquisition opportunities. We are prepared to support additional capital needs of the business.

In June 2005, Windjammer acquired, along with management, a controlling interest in Automatic Bar Controls (ABC). Windjammer invested $27.8 million in a combination of subordinated debt, preferred stock and common stock. ABC is a global leader in the design, development, and manufacture of innovative dispensing solutions for the food service and beverage industries. ABC’s proprietary products include the world’s dominant hand-held soft drink and juice dispenser, an array of condiment and sauce dispensing products, and liquor and draft beer dispensing systems. To ensure a smooth process, Windjammer provided all of the subordinated debt and equity required to close the transaction. In addition, the CEO and co-founder of the business maintain a significant ownership interest. As a control investor, Windjammer plans to be a long-term partner to ABC and its management team and will actively support the company’s strategic and capital needs.

Windjammer provided two rounds of financing working with Greg Engels, an unfunded sponsor, and his management team to support a consolidation play in the liquid dairy industry. The dairy industry is very mature and Greg’s plan was to consolidate inefficient dairies into leading platform dairies in specific geographical markets. As a result of this strategy, Suiza was able to generate operating leverage and distribution efficiencies in specific markets. Commencing in 1992 and as a minority equity/subordinated debt investor, Windjammer provided two rounds of financing to support initial platform dairies in Puerto Rico and subsequently in Florida. Suiza went public in 1998 and was able to secure additional rounds of public financing to pursue its strategy of continuing to consolidate the industry. Eventually Suiza acquired another publicly traded company, Dean Foods Corporation (NYSE: DF), adopting the latter’s name and has become a national dairy and branded food company to include becoming a leader in providing soy and organic products. Starting with our first platform dairy in Puerto Rico with about $190 million in sales, Dean Foods has revenues in excess of $10 billion today and is the largest dairy operator in the world with a market capitalization of about of $5 billion.

Commencing in 1992, Windjammer invested $7.5 million in a convertible note in the leading company providing private prisons and correctional services to a variety of government clients including the Federal Bureau of Prisons, US Marshal Service, Immigration and Customs Enforcement and many states as well. The initial investment was to support the company’s effort to grow its base of owned facilities, which had attractive economics associated with individual units. In addition, Windjammer made subsequent investments in the company in 1996 and 1998 increasing Windjammer’s overall investment to the company to in excess of $52.5 million. At the time of Windjammer’s initial investment in 1992, the company had a revenue base of about $85 million and about 7,000 beds under management. Due to the additional financing support from Windjammer and subsequent rounds of financing from the public markets, Corrections Corporation of America (NYSE: CXW) has grown its base of beds to 71,000 and is the world’s largest provider of private corrections with revenues in excess of $1 billion today. At the end of 2005, Windjammer was the company’s largest shareholder with the company having a market capitalization of in excess of $2.0 billion.

In 1998, Windjammer made a $13 million investment in subordinated and preferred stock in a company which was a leading provider of offsite parking lot services at airports west of the Mississippi. In concert with the Chavez family which controlled PCA, Windjammer led an investor group in providing capital to allow PCA to expand its ownership of parking lots in such key markets as Dallas, Oakland, Denver and other growing markets. The company was able to expand its presence to over 120 facilities and 45,000 parking spaces as a result. Subsequently, PCA was able to grow its operations through a joint venture with the MacQuarie Group, an Australian based infrastructure investment company, and eventually went public in concert with other MacQuarie properties.