Unique Fabricating, Inc. (“Unique” or the “Company”) which engineers and manufactures multi-material foam, rubber, and plastic components utilized in noise, vibration and harshness management and air/water sealing applications for the automotive and industrial appliance market, today announced it has acquired the business and substantially all of the assets of Great Lakes Foam Technologies, Inc. (“Great Lakes”), a Michigan based manufacturer of molded polyurethane components. Great Lakes manufactures components for applications in a wide range of end-markets including the automotive, off-road vehicle, industrial equipment, medical and office equipment industries.
“This strategic, highly synergistic and accretive acquisition will broaden our solutions offering and expand our reach into new markets, helping to diversify our revenues and bolster our free cash flow,” commented John Weinhardt, Unique’s Chief Executive Officer. “Great Lakes’ historical growth rate and margin profile is similar to ours, providing a compelling base to augment our financial performance. We are confident we can leverage our sales force and existing customer base to unlock a number of synergies that will accelerate our growth. In the first 12 months, we expect the acquired business and assets to generate revenues of approximately US$12 million and be accretive to our earnings.”
Great Lakes generated approximately US$10.0 million in revenues for the 12 month period ending December 31, 2014, with net income of approximately US$1.2 million (assuming a federal tax rate of 34% and a state tax rate of 3%) and EBITDA of approximately US$2.0 million.
Mr. Weinhardt added “This combination further accelerates our efforts to increase sales to existing customers while also opening doors to new customers and new end-markets. The addition of molded polyurethane components is a natural extension to our product line and we have identified a number of cross-selling opportunities within our combined customer base.”
In consideration for the acquisition, Unique paid US$12 million in cash at closing, with a portion being held in escrow to fund the obligations of Great Lakes and its stockholders to indemnify Unique against certain claims, losses, and liabilities. The cash purchase price is subject to adjustment based upon Great Lakes working capital at closing. In addition to the cash purchase price, Unique agreed to assume certain, specified liabilities. The transaction was funded under the Company’s existing US$19.5 million revolving line of credit. The line of credit bears interest at the 30 day LIBOR plus a margin that ranges from 2.75 to 3.25. As of the end of July 2015, the annual effective interest rate was 3.1905%.