Managers of Precision Southeast Inc. and business development company Gladstone Investment Corp. have invested equity capital in the custom injection molder, which the company said will fuel growth.
The new capital structure buys out the stakes formerly held by Richard Averette and Bill Bradbury.
Averette, Bradbury and current President Harry Ussery had owned Precision Southeast since February 1991.
Under the new ownership structure, some members of the current management team will have an opportunity to join Ussery with equity stakes in the company.
Our management team is really excited about it, Ussery said in a Jan. 4 telephone interview. The current team, including Ussery, is staying intact.
The investments consisted of both equity and senior debt. Gladstone said Dec. 28 that it had invested $10.8 million to recapitalize the molder.
Gladstone is a publicly traded business development company based in McLean, Va.
Precision Southeast has plants in Myrtle Beach and Marion, S.C., plus offices in Greenville, S.C.
The company reported $15 million in molding sales in Plastics News' most recent survey of North American injection molders. Ussery said the company will post close to $19 million in sales in 2010, and he expects a strong 2011.
We got hit in late 2008 and 2009. We got caught by surprise like the rest of the industry did. We started recovering in the last half of 2009, he said. A lot of the business we landed came as a result of the financial difficulty of some of our competitors, so it's kind of bittersweet.
Some key growth markets for the company include filtration for off-road diesel vehicles, auto aftermarket, and appliances.
We're going to have one of our best profit years in 2010, mainly because out of necessity we got very lean in 2009, Ussery said.
The recapitalization has given the company flexibility to respond to growth opportunities, he said.
We're planning not major but we're planning some of our highest [capital expenditures] in 2011 that we've had in about four or five years, he said.
PSI weathered the economic downturn and is positioned to grow by expansion within its existing customer base and through new business development efforts, Gladstone President Dave Dullum said in a news release.