Cherry Tree Advises Koch Industries

Cherry Tree Advises Koch Industries

Koch Industries

Cherry Tree Advises Koch Industries on their Sale Process

IntegritySolutions

“Cherry Tree was instrumental in gauging the market and determining values and how to make a transaction successful in a difficult environment.”

— Rod Garbe, Chief Operating Officer and Chief Financial Officer, Koch Industries, Inc.

INDUSTRY:
Consumer Products

DESCRIPTION:
Koch Industries is a premier provider and merchandiser of rope and twine, chain and wire rope, and related hardware products

HQ LOCATION:
Minneapolis, MN

TRANSACTION TYPE:
100% Sale to Hillman Solutions Corp.

Transaction

In January 2024, Koch Industries, Inc. (“Koch” or the “Company”) was acquired by Hillman Solutions Corp. (“Hillman”) (Nasdaq: HLMN), a leading provider of hardware products and merchandising solutions. This acquisition marks the entrance into rope and chain, a new product category for Hillman.
 
The Company’s 2,300 SKUs are in the complex, high-touch, rope and chain and associated hardware category which is a perfect addition to Hillman’s existing 112,000 SKU-portfolio. Koch’s customers include local and national retailers in the traditional hardware and farm and fleet channels based in the United States, and during its fiscal year ended May 31, 2023, Koch’s revenue totaled approximately $45 million. Financial terms of the transaction were not disclosed.

Koch Industries was founded by Randy and Dave Koch, entrepreneurs who have successfully built numerous companies.

Cherry Tree’s Role

Cherry Tree was engaged to advise the Company on the sale of the business. This included leading a competitive process to identify potential buyers and secure offers. Cherry Tree’s role included preparing evaluation material, communicating with target buyers, soliciting offers, negotiating terms, and supporting due diligence.

About Koch Industries, Inc.

Koch, a Minnesota based company established in 1978, is a premier provider and merchandiser of chain, rope, wire rope, hardware, load binders, cable pullers, 3-point hitch, trailer jacks and garage organization products.

While Koch was first established as a distributor of wire rope to farm stores, it successfully expanded its customer base to home improvement, hardware, and other retail market channels. In 2017, Koch Industries acquired Lehigh Consumer Products, LLC, now fully operating under Koch Industries, Inc. For more information visit www.kochmm.com

About Hillman Solutions Corp.

Founded in 1964 and headquartered in Cincinnati, Ohio, Hillman Solutions Corp. and its subsidiaries are leading North American providers of complete hardware solutions, delivered with outstanding customer service to over 40,000 locations. Hillman designs innovative product and merchandising solutions for complex categories that deliver an outstanding customer experience to home improvement centers, mass merchants, national and regional hardware stores, pet supply stores, and OEM & industrial customers. Leveraging its leading distribution and sales network, Hillman delivers a “small business” experience with “big business” efficiency. For more information on Hillman, visit www.hillmangroup.com.

About Cherry Tree & Associates

Cherry Tree & Associates is a private investment banking firm headquartered in Minneapolis, Minnesota. Founded in 1980, it specializes in M&A transactions for both buyers and sellers of middle market companies. Additionally, it conducts private placements for high quality, entrepreneurially managed growth companies, provides strategic advisory services for CEOs and boards of directors, and prepares fairness opinions and other valuation services.

Cherry Tree & Associates provides investment banking services through our FINRA-licensed broker dealer.

DISCLOSURES
FINRA
SIPC

Cherry Tree Advises Hearing Components (d.b.a ComplyFoam)

Cherry Tree Advises Hearing Components (d.b.a ComplyFoam)

Hearing Components

Cherry Tree Advises Hearing Components (d/b/a ComplyFoam)

INDUSTRY:
Consumer and Industrial Products
DESCRIPTION:
Leading Manufacturer and Distributor of Audio Enhancement and Hearing Products
LOCATION:
Oakdale, Minnesota
TRANSACTION TYPE:
100% Management Buyout

Situation:

In July 2023, the owners of Hearing Components (doing business as Comply) sold the company to CEO Chris Hudson and an investor group. Hearing Components was owned and founded by Robert and Dee Oliviera, who originally purchased the intellectual property from 3M in 1990.

Cherry Tree’s Role:

Cherry Tree was engaged to help the owners evaluate their strategic alternatives, which included seeking parties that would maximize the proceeds for a foundation they started, while also protecting the culture of the Company, supporting growth initiatives, and continuing to provide excellent products to its customers. Cherry Tree advised the Company through a process that included introductions and discussions with numerous potential industry and financial acquirers, soliciting proposals, negotiating terms, supporting due diligence, and facilitating the closing of the transaction by ultimately striking a deal with the management team and an investor group they formed. Chris Hudson’s experience and vision for the future of the business as well as his shared value and commitment to all stakeholders, made him the ideal steward for the Company.

About:

Hearing Components: Founded in 1990, Hearing Components is a leading manufacturer and distributor of patented and proprietary audio enhancement and hearing health products designed for performance and comfort. The products are highly-rated and compatible with over 95% of consumer brands while its high-noise products have been trusted by military forces for over 20+ years. The Company distributes globally.

About Cherry Tree & Associates:

Cherry Tree & Associates is a private investment banking firm headquartered in Minneapolis, Minnesota. Founded in 1980, it specializes in M&A transactions for both buyers and sellers of middle market companies. Additionally, it conducts private placements for high quality, entrepreneurially managed growth companies, provides strategic advisory services for CEOs and boards of directors, and prepares fairness opinions and other valuation services.

Cherry Tree & Associates provides investment banking services through our FINRA-licensed broker dealer.

DISCLOSURES
FINRA
SIPC

Cherry Tree Advises Heigl Adhesives on its Sale to APPLIED Adhesives

Cherry Tree Advises Heigl Adhesives on its Sale to APPLIED Adhesives

Heigl Adhesives

Cherry Tree Advises Heigl Adhesives on its Sale to APPLIED Adhesives

Heigle Adhesives acquired by APPLIED adhesives

“We began working with the Cherry Tree team while we were in early discussions with Applied. The Cherry Tree team provided key advice and counsel before and during the negotiation of a Letter of Intent. Once the LOI was signed, Cherry Tree managed an extensive due diligence process, and directed the negotiation, completion of legal documents, and closing of the transaction.

Cherry Tree’s experience in managing and driving the process through closing and being involved in all the details throughout the process, were keys to our successful transaction. The result was a great outcome for our family, employees, and customers.”

— Dustin Heigl, CEO and Co-Owner, Heigl Adhesives

INDUSTRY:
Industrial – Value-added Distributor
DESCRIPTION: 
Supplier of industrial adhesives and dispensing equipment
HQ LOCATION: 
Minneapolis, MN
TRANSACTION TYPE:
Sale to PE-Backed Strategic Buyer

Transaction:

APPLIED Adhesives, a premier custom adhesive solutions provider in North America, today announced that it has completed its acquisition of Heigl Adhesives. Based in Eden Prairie, MN, Heigl has over 30 years of adhesive and adhesive dispensing equipment experience across a broad range of industries. The acquisition strengthens APPLIED’s commitment to providing industry-leading products, technical expertise, and relentless service to its customers.

“We are excited to expand APPLIED’s offerings through the acquisition of Heigl Adhesives as we share the same dedication to providing outstanding service, innovative solutions, and the highest quality products to our customers,” said John Feriancek, President and CEO of Applied Adhesives. “We are pleased to welcome the Heigl team and its customers to APPLIED Adhesives and look forward to continuing to deliver industry-leading custom adhesive solutions.”

“I couldn’t be more excited about Heigl joining the APPLIED team. We looked hard at the core values and culture of both companies and it’s a great fit on so many levels,” said Dustin Heigl, CEO, Heigl Adhesives. “Coming together with APPLIED is going to give us even more resources to support all of our valued customers, which will always be our highest priority.”

Source: appliedadhesives.com

Cherry Tree’s Role

Cherry Tree was engaged by Heigl Adhesives to advise the company on its strategic alternatives related to the sale of the company. Cherry Tree led the process of negotiating and finalizing the Letter of Intent, negotiating terms of the purchase agreement, supporting the due diligence process, and coordinating the closing of the transaction.

“Cherry Tree played a key role leading our team through the successful sale to Applied Adhesives. Their guidance and support helped minimize disruption to the business during this process and facilitated an efficient closing.”

— Mark Heigl, Co-Owner, Heigl Adhesives

About Heigl Adhesives

Heigl Adhesives is a leading supplier of industrial adhesives and dispensing equipment based in Minneapolis, Minnesota. The company has been in business for over 30 years and has long-standing relationships with top adhesive and equipment manufacturers. Heigl uses its decades of adhesive expertise and strong industry partnerships to help manufacturing companies of all sizes find the right adhesive solutions for their needs, keep costs low, and keep production running smoothly.

About APPLIED Adhesives

APPLIED Adhesives, founded in 1971, is a premier custom adhesive solutions provider in North America. Our experts source the adhesives, equipment, and parts you need while providing maintenance services that help you run at optimum efficiency. APPLIED offers customized solutions with a cost-in-use approach that saves you time and money.

About Arsenal Capital Partners:

Arsenal is a specialized private equity firm with what it believes are market-leading franchises in the industrials and healthcare sectors. The firm’s mission is to build high-growth, technology- and innovation-rich businesses that are strategically important in their markets and deliver value for all stakeholders.

About Cherry Tree & Associates

Cherry Tree & Associates is a private investment banking firm headquartered in Minneapolis, Minnesota. Founded in 1980, it specializes in M&A transactions for both buyers and sellers of middle market companies. Additionally, it conducts private placements for attractive, entrepreneurially managed growth companies, provides strategic advisory services to CEOs and boards of directors, and prepares fairness opinions and other valuation services.

Cherry Tree & Associates provides investment banking services through our FINRA-licensed broker dealer.

DISCLOSURES
FINRA
SIPC

SOS_AUXO

SOS_AUXO

SOS Manufacturing

Cherry Tree Advises SOS Manufacturing on its Sale to Auxo Investment Partners

“We first met the Cherry Tree team a few years ago. Their early advice was helpful in our decision not to sell then but rather continue growing and strengthening our business. When we were ready to sell, we engaged Cherry Tree. They led a disciplined process that created a competitive situation among multiple qualified buyers. The Cherry Tree team provided invaluable advice during the process and was with us every step of the way through closing. Cherry Tree worked closely with our financial and legal advisors and provided the overall project management to get a successful transaction completed. The result was a great outcome for our shareholders, employees, and customers.”

— Ray Stoner and Steve Oakins, Owners

INDUSTRY:
Industrial supplier to the automotive, aerospace, computer, electronic, networking and security sectors
DESCRIPTION:
Manufacturer of custom wire harness and cable assemblies
LOCATION:
Roberts, WI
TRANSACTION TYPE:
Sale to Financial Buyer

Transaction

SOS Manufacturing has announced that it has been acquired by Auxo Investment Partners, a Michigan based private equity firm. This transaction marks Auxo’s fourth acquisition in the space as the firm builds out its wire harness platform.

SOS Manufacturing makes specialized wire harnesses for business customers all over the world. The company was organized in 2001 and is currently headquartered and builds product in its facility in Roberts, Wisconsin. Major sectors served include automotive, aerospace, computer, electronic, networking and security. In addition, the Company offers engineering assistance, CAD drawings, complete box builds/product assembly and part kitting.

Cherry Tree’s Role

Cherry Tree was engaged to advise SOS Manufacturing and its shareholders in identifying the best partner to help SOS achieve its next phase of growth through a sale of the business. The objectives were to maximize shareholder value and terms of a transaction, while managing an efficient closing process. Cherry Tree’s role included preparing evaluation materials, identifying and screening buyers, soliciting proposals, negotiating terms, supporting due diligence, and facilitating the closing of a transaction. It was especially important to the shareholders and management team that the process was well planned and efficiently executed, to not disrupt the core business operations, and to complete the transaction in a timely manner.

About Auxo Investment Partners

Auxo Investment Partners is a Grand Rapids, Michigan-based private investment firm that partners with owners and management teams of companies at transition points in their history. Auxo’s flexible capital model allows for long-term, growth-oriented decision-making without artificial deadlines. The structure was specifically designed for family businesses facing a generational transition or management teams seeking a partner to fuel growth and achieve their full potential with a long-term investment approach. Auxo’s unique philosophy aligns the interests of its companies, their employees, the communities in which they are located and its investors to achieve optimal outcomes for all. For more information, please visit www.auxopartners.com.

About Cherry Tree & Associates

Cherry Tree & Associates is a private investment banking firm headquartered in Minneapolis, Minnesota. Founded in 1980, it specializes in M&A transactions for both buyers and sellers of middle market companies.  Additionally, it conducts private placements for high quality, entrepreneurially managed growth companies, provides strategic advisory services for CEOs and boards of directors, and prepares fairness opinions and other valuation services.

Cherry Tree & Associates provides investment banking services through our FINRA-licensed broker dealer.

DISCLOSURES
FINRA
SIPC

Villaume_USLBM

Villaume_USLBM

Villaume Industries

Cherry Tree Advises Villaume Industries on their Sale to US LBM

“The Cherry Tree team led a disciplined and competitive process and provided the advice and counsel we needed both leading up to the sale process and during the sale process.  Their professional guidance, sound and respectful counsel and calming tone were instrumental in us completing a successful transaction.  The result was a great outcome for our family, employees and customers.”

– Nicholas Linsmayer, President and fourth generation Owner, Villaume Industries, Inc.

INDUSTRY:
Industrial – Building Products
DESCRIPTION:
Designer and Manufacturer of Precision Wood Products
LOCATION:
Saint Paul, Minnesota
TRANSACTION TYPE:
100% Sale to Strategic Buyer

Transaction

US LBM, a leading distributor of specialty building materials in the United States, has acquired Villaume Industries, a manufacturer of wood trusses for new residential and commercial construction and of custom wood crating, boxes and pallets in Minnesota. 

Based just outside of Saint Paul in Eagan, Minnesota, Villaume is a leading designer and manufacturer of precision wood products. The company, founded in 1882, provides floor and roof trusses for national, regional and local homebuilders in the Twin Cities metropolitan area and across Minnesota. Additionally, Villaume engineers and manufactures custom wood packaging of pallets, crates and cores for manufacturing companies.

With the addition of Villaume, US LBM now operates 21 locations in Minnesota through its network of divisions in the state, which include Lampert Lumber, NexGen and Lyman Companies; Villaume will operate as a unit of Lyman.

“Villaume has a reputation for both excellence and partnership, and we’re pleased to have them join the US LBM team,” said US LBM President and CEO L.T. Gibson. “Villaume’s capabilities and footprint complement Lyman and its addition to our portfolio enhances our already strong position in the growing Twin Cities market and beyond.”

Cherry Tree’s Role

Cherry Tree was engaged by Villaume Industries to advise the company on its strategic alternatives related to the sale of the company. Cherry Tree led the process that included introductions and discussions with numerous potential acquirers and financial partners, soliciting proposals, negotiating terms, supporting the due diligence process, and facilitating the closing of the transaction.

“The Cherry Tree team led a disciplined and competitive process and provided the advice and counsel we needed both leading up to the sale process and during the sale process.  Their professional guidance, sound and respectful counsel and calming tone were instrumental in us completing a successful transaction.  The result was a great outcome for our family, employees and customers.” – – J Nicholas Linsmayer, President and fourth generation Owner, Villaume Industries, Inc.

About Villaume Industries, Inc.

Based just outside of Saint Paul in Eagan, Minnesota, Villaume is a leading designer and manufacturer of precision wood products. The company, founded in 1882, provides floor and roof trusses for national, regional and local homebuilders in the Twin Cities metropolitan area and across Minnesota. Additionally, Villaume engineers and manufactures custom wood packaging of pallets, crates and cores for manufacturing companies.

About US LBM

US LBM is a leading distributor of specialty building materials in the United States. Offering a comprehensive portfolio of specialty products, including windows, doors, millwork, wallboard, roofing, siding, engineered components and cabinetry, US LBM combines the scale and operational advantages of a national platform with a local go-to-market strategy through its national network of locations across the country. For more information, please visit www.uslbm.com.

About Cherry Tree & Associates

Cherry Tree & Associates is a private investment banking firm headquartered in Minneapolis, Minnesota.  Founded in 1980, it specializes in M&A transactions for both buyers and sellers of middle market companies.  Additionally, it conducts private placements for high quality, entrepreneurially managed growth companies, provides strategic advisory services for CEOs and boards of directors, and prepares fairness opinions and other valuation services.

Cherry Tree & Associates provides investment banking services through our FINRA-licensed broker dealer.

DISCLOSURES
FINRA
SIPC