Gryphon Investors, the San Francisco-based private equity firm, announced today that it completed the sale of its portfolio company, MSD Ignition, to management and ValueAct Capital. The transaction yielded Gryphon a cash return of 2.5 times its investment and an IRR of approximately 175%.
Gryphon Investors acquired El Paso, Texas-based MSD Ignition in April, 2004. MSD is a branded consumer products company that manufactures and sells high-performance automotive ignition components to aftermarket suppliers. Considered the most recognized name in performance ignition systems, MSD products are used in everything from NASCAR, NHRA and IHRA drag racing to SCORE off-road racing, World of Outlaw sprint cars, and a host of other motorsports applications.
In February of this year, Gryphon led MSD’s acquisition of Superchips, Inc., the leading manufacturer of performance programmers and chips for late model production cars and trucks, serving both the gas and diesel markets. That acquisition allowed the two brands to complement each other’s technology base and advance their respective capabilities in performance electronic controls and components.
“The fact that we have been able to realize a significant return for our investors in one year is another example of the benefits of our proactive investment strategies and integrated operations capability,” said David Andrews, President and Managing General Partner of Gryphon. “We proactively targeted the performance automotive parts industry as attractive, saw the considerable potential in MSD, and put steps in place to improve MSD’s manufacturing and distribution capabilities, which Superchips is now leveraging further. In short, we successfully executed our strategy and earned the opportunity to exit our investment quickly with strong returns.”
Andrews added, “The MSD management team, led by new CEO Dan Gresham, with whom we formed an exclusive alliance to target the industry even before meeting MSD, deserves credit for their excellent focus and management of the business. It is not an easy task to accomplish the myriad operating initiatives that this business required, while simultaneously recovering from a sale process and then supporting our exit, all within 12 months. We wish Dan and the team the best going forward with what I’m sure will continue to be an exciting opportunity for the MSD platform under Dan’s leadership.”
About Gryphon Investors
Based in San Francisco, Gryphon Investors focuses on leveraged acquisitions of, and growth investments in, middle-market companies in partnership with experienced management. Having managed more than $1 billion of discretionary equity capital, Gryphon has an extensive track record of investing $25 to $75 million of its own capital in companies with sales ranging from $25 to $250 million. Gryphon prioritizes investment opportunities where it can form proactive partnerships with owners and executives to build leading companies, utilizing Gryphon’s capital, professional resources and significant financial and operational expertise. Visit www.gryphoninvestors.com for more information.
- Owen Blicksilver
- Owen Blicksilver Public Relations, Inc.