GERMANTOWN, WIS. (Updated June 28, 2:50 p.m. ET) — MGS Manufacturing Group Inc. has obtained a $15 million subordinated debt investment from a private equity company, and MGS officials said the company in Germantown, Wis., is using the money for projects such as a clean room, its new plant Ireland — and to refinance a line of credit secured by Solyndra LLC, the solar panel maker that filed for a high-profile bankruptcy last year.
Cyprium Investment Partners LLC of Cleveland, a private equity firm focused primarily on noncontrol investments, announced the investment in the Germantown-based injection molding company, and maker of molds and injection units. MGS will use Cyprium's investment to refinance a portion of its existing debt and to support continued domestic and international growth.
MGS does injection molding and makes molds and injection units used for multi-shot molding.
“MGS has differentiated itself in a competitive industry by providing turnkey custom molding solutions for its customers,” said Leland Lewis, a managing partner at Cyprium, in a statement. “MGS can design and build complex tools, automate production lines using proprietary equipment and produce high-quality molded parts that conform to some of the most stringent tolerances in the global marketplace.”
He added: “We pride ourselves on supporting companies like MGS that have created sustainable and dynamic niches within their respective industries.”
MGS' chief financial officer, Paul Manley, said the Cyprium debt is a loan for the refinancing and current expansions. It also gives MGS the freedom for future investments, such as a new facility or an acquisition, he said.
“We certainly have a big customer list that has new opportunities in the future,” he said.
Manley said part of the Cyprium debt is for the MGS investment in a plant in
MGS also is a major unsecured creditor to Solyndra, the shuttered solar panel maker in
Solyndra's demise continues to make headlines in the made presidential contest. The company closed in August of 2011, laying off more than 1,000 people. A bankruptcy filing soon followed. Solyndra had received more than $500 million in federal government-backed loans, and critics say that several Solyndra investors donated money to President Obama.
MGS got caught in the mess, as Solyndra's second-largest unsecured creditor, owed $7.5 million in trade debt. MGS custom-built three giant vertical injection molding machines in
Manley said MGS had secured a line of credit using receivables from Solyndra. Part of the Cyprium debt refinancing will be used to pay back that earlier line of credit, he said.
Cyprium has offices in
Crain's Cleveland Business, a sister publication, contributed to this report.