Private equity's Crestview buys Concours Mold with aim to acquire more toolmakers

Crestview Partners LP has jumped into the mold and tooling sector — a place where few private equity companies have gone — to purchase Concours Mold Inc., a big Canadian automotive mold maker with a multinational footprint.

And the New York-based Crestview wants to buy more mold makers.

"Certainly, we're looking to deploy meaningful capital in this industry," said Alex Rose, a partner in Crestview who co-heads the firm's industrial investments area.

The acquisition of Concours Mold, completed May 30 for undisclosed terms, is the first step in a strategy to invest $200 million to acquire and integrate tooling and mold companies to build a global business with differentiated software simulation, machine learning and 3D printing capabilities, Crestview officials said.

"There is a compelling opportunity to create a global technology leader in the highly fragmented tooling and mold industry," Rose said. "Identifying niche industries which have not yet seen the emergence of a global leader is a core focus of Crestview's industrials investment strategy."

Concours is based in Lakeshore, Ontario, near Windsor — a center of automotive mold making. Concours is the fifth-largest mold and tooling maker in North America, according to Plastics News data, with $95 million in sales and 375 employees.

The mold maker has plants in Lakeshore; Cullman, Ala., and Huejotzingo, Mexico.

Toolmaker Mark Goggin founded Concours Mold in 1994. His sons, Dennis and Kenny Goggins, will remain with the company in their current roles, Dennis as vice president of manufacturing engineering and Kenny as deputy chief financial officer.

Andy Aiton will continue as president of Concours Mold.

Jason Luo, former chairman and CEO of Ford Motor Co.'s operations in China, will serve as chairman of Concours. He will work closely with newly recruited CEO Tony Nardone. Both men previously worked together at Key Safety Systems Inc., a maker of air bags, seat belts and safety systems — Luo as CEO and Nardone as president of the Americas.

Crestview and the Key Safety Systems management team bought Key in 2007 and sold it in 2016.

Luo also is a senior adviser at Crestview. "Concours is the first of many companies we hope to bring together to create a market leader with operations throughout North America, Europe and Asia," he said.

Crestview Partners manages funds with about $9 billion of aggregate capital commitments. The firm focuses on middle-market companies.

Mold consultant Laurie Harbour said not a lot of mold shops are owned by private equity. One that is: Tooling Tech Group, based in Macomb, Mich. — which made its own announcement May 30 that it has purchased Alpha Integration, a supplier of custom automation and inspection equipment. 

Tooling Tech is No. 2 on the Plastics News mold maker ranking, with $185 million in sales.

Harbour said Concours Mold is good core platform mold maker for Crestview. But she said it's been difficult for private equity to make inroads in the tooling sector — as opposed to mass production industries like injection molding, where rollups from mergers and acquisition are common in automotive, packaging and other markets.

"I do think there's opportunities for the industry to consolidate more, it's just not as easy as plastics molding," she said.

She said her consulting company, Harbour Results Inc., has identified about 20 mold shops with sales over $50 million. Concours Mold's global operations in Canada, the United States and Mexico, is an attractive feature. Most tool shops don't have multiple facilities, Harbour said.

"It's definitely a highly fragmented industry, there's no doubt about that. And there's a handful of large companies like Concours," said Harbour, president and CEO of her Southfield, Mich.-based firm.

"Many people, for years, have believed that it's a great industry for that rollup concept like we've seen in plastics. But it's not as easy an answer as it is for a production company. There are many fewer tool suppliers than there are for molding," Harbour said.

She said the majority of mold shops have sales of less than $15 million. Many are much smaller. And owners of smaller companies often have a long family heritage in mold making, going back to fathers and grandfathers. They have weathered economic storms like competition from China and current challenges like steel and aluminum tariffs. A mold shop may have 25 or 30 highly skilled machinists, Harbour said. Metalworking is craft oriented.

"The answer for them is a little more challenging. A lot of these small business owners don't want to sell," she said. "So it makes it a little more difficult of a business model, to take these companies and do a rollup."

Harbour said there are plenty of well-run $10 million to $20 million tool shops that could be good acquisition candidates.

Crestview's Alex Rose said the firm will look at mold makers of all sizes, including mid-sized companies that offer new end markets, new customers and new geographical locations. Small mold makers could offer a strategic geographic reach, he said.

"We would do more than just try to acquire the top two or three players," he said.