GRAND RAPIDS (WWJ) — Grand Rapids-based Blackford Capital has announced the acquisition of Grand Haven-based Grand Transformers Inc., a designer and manufacturer of transformers and inductive components for the elevator, power quality, medical, instrumentation and energy industries.
Blackford officials said the acquisition is the third for its Michigan Prosperity Fund, created in 2012 to generate top returns for investors and support the local economy by protecting and creating Michigan jobs.
The Michigan Prosperity Fund has also acquired Grand Rapids-based Custom Profile Inc., a manufacturer of plastic extrusion products, and Oak Park-based Mopec, which makes autopsy, mortuary and morgue equipment and instruments.
Blackford is a national private equity firm that buys, manages and builds middle-market manufacturing, distribution and service companies. It has six portfolio companies that employ a total of 950 people with aggregate revenue of about $225 million a year.
Grand Transformers was founded in 1948 by K.C. Retzlaff. The company was purchased from Retzlaff by his two sons, Greg and Jerry, in 1973 and currently employs 70 people at its 55,000-square-foot plant in Grand Haven.
“Grand Transformers’ advanced engineering and lean manufacturing operations have made the company the market leader in its field,” said Jeff Helminski, managing director of Blackford Capital. “We are honored that Greg and Jerry have entrusted their family legacy to our stewardship, and are excited to work with the existing GTI management team to grow the company and create jobs in Michigan.”
Blackford Capital will be implementing a board of directors and employing operating partners to support the management team and the growth of the business. Ed Smith, currently GTI’s COO, will be promoted to CEO and will continue to lead the GTI team.
“Blackford Capital brings a wealth of strategic knowledge and financial resources to GTI,” Smith said. “We look forward to working closely with Blackford to grow our existing business, expand into new markets, and add more jobs in the community.”
Comerica Bank and Huntington Bank provided financing for the transaction.
GTI’s board of directors will consist of Jeff Helminski, Blackford Capital managing director; Ed Smith, CEO of Grand Transformers; Wesley MacAllister, Blackford Capital operating partner and former vice president of manufacturing at Cascade Engineering; Shreedhar Shah, president of power systems engineering firm Shah and Associates; Robert Roth, president of transformer manufacturer RoMan Manufacturing; and others to be named later. All board members have strong ties to Michigan and a depth of talent and expertise that will be instrumental to GTI’s continued growth.
Blackford officials said they reviewed roughly 3,400 transactions in 2013, and have closed 26 transactions in the past seven years. Grand Transformers is Blackford’s sixth portfolio company and its third in Michigan. The firm’s investment criteria include mature, profitable businesses with revenues between $20 million and $100 million and with management teams that are either willing to remain with the company or are seeking to retire. For more information, visit http://www.blackfordcapital.com.