By: Jim Johnson
April 28, 2014
In Technimark LLC, the Pritzker Group investment firm saw a company with what it calls a great management team and great opportunities.
In Pritzker Group, Technimark saw the chance to work with a financial partner looking for a long-term relationship and one that can help the rigid plastic packaging and components maker continue to grow around the world.
So Pritzker has taken a majority stake in the Asheboro, N.C.-based company, buying out investment firm Quad-C Management Inc.’s share of the business.
Members of Wellington family, including founder Don Wellington and current CEO Brad Wellington, continue to own a minority of the company along with other senior managers.
“What we’re focused on is building great businesses for the long term. So we invest in great management teams and great opportunities like Technimark,” said Michael Nelson, investment partner in the private capital team at Pritzker Group.
Nelson, along with the Wellingtons, spoke about the deal literally just minutes after it closed April 25.
“The Pritzker Group was a great fit for Technimark for several reasons,” Brad Wellington said. “They supported our vision and supported our growth strategy.”
“They are very stable. They have a long-term investment strategy, which is great for all of our stakeholders, our customers, our employees, our vendors, so that we can have a very stable ownership structure going forward to support our growth,” he said.
Pritzker Group is led by Tony Pritzker and J.B. Pritzker, two members of the famous Pritzker family that made billions thanks, in part, to Hyatt hotels.
Using their own money, the Pritzkers feel no pressure to flip investments after a set period of time, typically five to seven years for many private investment firms. And that was attractive to Technimark.
“We have a completely flexible holding period,” Nelson said. “We have a permanent, proprietary capital base that allows us to invest in the long term. We’re very different from a traditional private equity fund in that we don’t have outside investors and therefore our decisions are driven purely on building great companies like Technimark over the long term,” Nelson said.
Quad-C, of Charlottesville, Va., had been involved with Technimark since 2007 and let it be known late last year it was time to cash out of the investment. Pritzker Group, which focuses on businesses with between $100 million and $500 million in annual sales, emerged as the winner.
Pritzker Group, based in Chicago and Los Angeles, likes to invest in three key areas: manufactured products, healthcare and services.
“The packaging sector, as a whole, is a core proactive area of investment focus for the Pritzker Group. So we certainly were aware of Technimark. It’s one of the leaders on the planet in terms of injection molding capabilities,” Nelson said.
While Technimark has operations around the world, the company also realizes a need to continue growing with its customers.
Consumer packaging is a core business for Technimark, and as consumer products companies expand globally, the packaging company needs to follow.
“They are taking a more strategic look at their supply base and they want us to be able to grow with their plans,” Don Wellington said.
“As we become more of a global corporation, it gives us the foundation to do that more quickly and more securely,” he said. “That was important to our picking Pritzker as a company we wanted to work with.”
Don Wellington founded the company back in 1983 and is still involved as chairman for the company with nine locations in the United States, Mexico, Germany and China.
With the Technimark deal now closed, Pritzker Group could make additional investment in plastics packaging in the future.
“Injection molding clearly is a space that we like. We also like certain parts of the flexible packaging industry. As you know, it’s a very big industry with a lot of continued fragmentation. So we think there’s great opportunity for further investment there,” he said.
“Our strategy is to find clear market leaders serving growing global markets with excellent management teams. Technimark certainly has that. We don’t anticipate any changes to the senior leadership of the company or the employee base,” Nelson said.
Technimark’s services include packaging design and production, recycling and product distribution. Major customers include Procter & Gamble Co., Estee Lauder Cos. Inc., Clorox Co. and Wal-Mart Stores Inc., the company said.
Terms of the deal were not disclosed.