By Maureen Flanagan
Phillips & Temro Holdings, LLC ("PTI") is the North American leader and second largest global supplier of cold weather starting and comfort products to the diesel automotive and truck market and aftermarket. It also sells emissions control and engine silencing products to diesel engine manufacturers and numerous industrial customers. Headquartered in Minneapolis, MN, the company serves a blue-chip customer base and stands at the forefront of providing products that improve engine performance, efficiency and fuel economy.
The Budd Company, which has become part of ThyssenKrupp Automotive AG of Germany, one of the largest automotive suppliers in the world, has owned Phillips & Temro since 1971. On November 8th, TMB Industries, a private equity firm focused on acquiring and managing middle-market industrial companies, acquired the U.S. and Canadian operations of PTI. American Capital Strategies, Ltd. (Nasdaq: ACAS) invested $5 million in senior subordinated debt in support of the acquisition,
"American Capital is an excellent investment partner as, under new ownership, PTI is poised to embrace strategic market opportunities," said Kenneth Tallering, TMB Managing Director.
PTI's cold start and emission control products are sold into the OEM and aftermarket under ZeroStartT and TemroT trademarks. The company's engine pre-heaters preheat engine coolant or oil to help start engines in cold temperatures. They also provide improved fuel economy while reducing cranking, engine wear and emissions. The company's air intake heaters provide cleaner and more controllable starting assistance for diesel engines. Introduced in 1995, the technology is replacing traditional methods of diesel engine combustion assistance. It also treats intake air after the engine is started, thereby enabling the heater to become part of emission control strategies.
PTI provides several lines of long-haul convenience and comfort products. The company's Cab PowerT is an innovative electrical system designed to deliver 120-volt power, cable television and telephone into truck cabs. The system enables drivers to use virtually any standard household electrical device from laptop computers to microwaves without idling the engine. In addition, the company produces a line of auxiliary heating products known as Cab and Cargo heaters. This line targets OEMs that retrofit production equipment for use in low temperature regions and where localized heat sources are needed for specialized applications.
PTI's CowlT and EM ProductsT silencer systems are designed to provide premium sound attenuation systems on intake and exhaust systems. PTI manufactures its silencer products for a wide variety of uses in the industrial blower market and for industrial and marine engine applications.
Many of PTI's products are patented and proprietary -- uniquely designed and specified for long-lived customer engine products. As a result, PTI maintains a commanding market share position in its key product niches.
PTI is well positioned in the market as demand for diesel engines grows. Some 75% of the company's products are sold for use on diesel engines or diesel powered products. While common in Western Europe, diesel engines are expected to become more widely used In the United States, particularly in light duty pickup and sport utility vehicles. The benefits of new diesel technology - it burns fuel more thoroughly, delivers more power, greater fuel economy and fewer emissions - are compelling reasons for manufacturers to shift to diesel engines.
The company also stands to benefit from more stringent pollution control regulations. PTI's products, such as its air intake heaters, are key components of emission control strategies employed by many of its engine OEM customers. The company's cab power wiring and heating devices are also designed to reduce pollution and mitigate the need for long periods of engine idling. This product will be particularly beneficial to PTI as more states adopt anti-idling laws.
PTI's products are expected to be in high demand as the truck industry rebounds and the automotive industry recovers from the weakened economy.
"The acquisition provides PTI with the financial resources to enable further market penetration and enhanced operational efficiencies. TMB Industries has an excellent track record of enhancing the value of mid-sized manufacturing businesses and brings expertise in the manufacture of truck components and assemblies," said Tom Gregory, American Capital Principal and Managing Director.
American Capital's investment was made alongside senior financing by LaSalle Bank N.A. TMB partnered with Chilmark Partners to jointly fund the equity of the PTI acquisition. With this acquisition financing of PTI, American Capital has invested over $1.4 billion in more than 70 companies since its 1997 IPO.
Click here for more information about American Capital's portfolio.
Already highly successful, PTI's strong fundamentals provide a solid foundation for further growth. With the resources provided by the acquisition, PTI has the capabilities and leadership to deliver products that will keep engines clean, quiet and efficient and drivers content and comfortable in the years ahead.
