Rotational molder Step2 Co. of Streetsboro, Ohio, has new ownership, with a buyout by private equity firm Liberty Partners of New York, backed by Allied Capital Corp. of Washington.
Step2 founder Tom Murdough also is a partner in the deal. Twenty-two other Step2 employees owned a stake in the company prior to the sale; that group, along with Murdough, now will own 20 percent of the firm.
The purchase means Step2 will focus on extending its product lines, diversifying its business and growing by acquisition, Murdough said in an April 24 telephone interview.
Allied invested $90 million in the transaction, but the total price was not disclosed.
The deal marks an end to a yearlong search for a buyer, Murdough said. Interested parties included strategic and financial players.
``It's really the best of both worlds for all parties concerned,'' Murdough said.
``We had a choice of whether we wanted to be acquired by a strategic buyer or a financial partner. To me, there was no question in my mind which way we had to go.''
Liberty Partners officials reached by telephone April 24 declined further comment.
An Allied Capital spokeswoman said there will be no change in management or operations.
Murdough, 67, will stay on as chairman and chief executive officer, but he said the buyout is part of a longer-term plan for the company.
``I'm at an age where, from an estate-planning standpoint, a lot of these things have to happen,'' he said.
The company has a strong, young management team that wants to build it with a private equity firm that appreciates the unique nature of the business, Murdough said.
Liberty Partners will make equity investments in the company and capitalize on the strength of the management team, he said.
``They're good people,'' Murdough said. ``They're making an investment in the management.''
Murdough founded Step2 in 1991, after he sold Little Tikes Co. to Rubbermaid Inc. Tikes now is owned by Newell Rubbermaid Inc. of Sandy Springs, Ga.
Murdough has sought to diversify Step2 during the past few years, growing further into injection and blow molding but never walking away from rotomolding as its core process, as it battled overseas competition and higher resin prices.
Step2's product portfolio comprises more than 150 stock-keeping units that include indoor play products and furniture, outdoor play and riding products and lawn and garden products. It employs roughly 800 at its headquarters plant in Streetsboro and sites in Perrysville, Ohio, and Fort Valley, Ga.
Its 2005 rotomolding sales were $106 million, up from $100 million in 2004, according to Plastics News' ranking of North American rotomolders.
Step2 is not the first plastics-related manufacturing company in which Liberty Partners has been involved. Liberty helped to build up PlayPower Inc., which acquired Little Tikes Commercial Play Systems in 2004.
Liberty partnered with management in 1993 to acquire privately held Miracle Recreation Holding Co., according to Liberty's Web site.
Miracle Recreation now is a unit of PlayPower. Its acquisitions included Soft Play LLC, a manufacturer of indoor play systems, and EZ Dock Inc., a rotomolder of modular docks and docking units based in Huntersville, N.C.
Liberty sold PlayPower to a major U.S. private equity group in December 2002, according to its Web site.