Management Capital buys display-fixtures firm

PROVIDENCE – Management Capital LLC says it has completed its purchase of the assets and business of Wire Weld USA Inc. of Lockport, N.Y., and Cost Effective Coatings Inc. of North East, Pa. The two are to be combined into a new corporation, Wire Weld Inc.
The private equity firm worked closely with the management of Wire Weld USA and Cost Effective Coatings to complete the deal; Management Capital provided equity and subordinated debt, and negotiated additional financing from M&T Bank of Buffalo, N.Y.
Wire Weld – a designer and manufacturer of wire display systems for retail and storage, which recently began serving customers in Australia, New Zealand and Singapore – was established in Toronto in 1983 and moved to the Buffalo area in 1993. It has a 35,000-square-foot fabrication plant there and a 103,500-square-foot powder-coating, warehousing and shipping facility in Pennsylvania, where it recently acquired a six-acre adjacent parcel and 25,000-square-foot facility to accommodate its need for additional warehouse, storage and staging space.
Cost Effective Coatings, a custom powder coater established in 1967 in the eastern Great Lakes region, had been owned since 1990 by Richard King and David Heth. In 2002, the duo acquired Wire Weld USA, for which the coatings company has provided powder-coated finishes in custom colors.
“We believe Wire Weld’s combination of brand recognition and superior design is a significant competitive advantage in the market domestically and internationally,” said Ernie Humphreys, a Management Capital principal and co-founder. “This provides a solid base for growth through expanded sales efforts and new product introductions, particularly in other retail venues such as home décor, sporting goods, office products and electronics.”
King, the companies’ president and CEO, and David Heth, their chief operating officer, will retain those posts in the new corporation, Management Capital said. King and Heth also will remain shareholders in the new corporation, along with the equity firm.
“We wanted capital to fund the future growth of the business and still retain an equity interest,” King said, adding: “Other investment firms were willing to give us money, but Management Capital offered the skills we needed to grow. The principals in Management Capital, their affiliates and their investors have strong ties to the retail industry that we’ve already begun to utilize.”
Management Capital LLC of Providence is a private investment firm with a hands-on approach focusing on small and middle-market companies. It has provided more than $275 million in risk capital to 80 portfolio companies. Additional information is available at www.mgtcapital.com.