Kilmer Capital sells its stake in McGregor Industries Inc.

McGregor Industries Inc, the 90 year old iconic Canadian hosiery company buys back shares from Tanenbaum-backed private equity fund, Kilmer Capital

TORONTO, Jan. 7 /CNW/ - (Friday December 17) Kilmer Capital Fund sold its stake in McGregor Industries Inc. to its operating partners, Earl and Jordan Lipson following the successful repositioning of the 90 year old Canadian hosiery icon.  McGregor has a long history of designing and marketing socks in Canada, the U.S., Europe and other global marketplaces under both its own brands, including McGregor®, Happy Foot® and American Essentials® as well as under license with well know American designer brands. Kilmer's investment was made in 2005 to bolster the company's finances in advance of a supply chain restructuring whereby two Toronto-based knitting mills were closed and the company's production moved to offshore suppliers.  After the restructuring was completed, the company went on to focus on its larger core programs, strengthen its owned brands and improve its operations.

The past 10 years have been challenging for Canadian apparel manufacturers with the rapid appreciation of the Canadian dollar, pricing pressure from a growing mass market channel and increasing competition from lower cost, global brands.  Canadian manufacturing operations had quickly become a significant competitive disadvantage for McGregor and the Lipson brothers knew a fast change was needed. "When we met Earl and Jordan Lipson in 2005," recalls Jason Berenstein, Principal at Kilmer, "the company had already moved close to 20% of its production to a group of highly qualified international subcontractors. We took comfort in management's early achievements and we bet on their ability to speed up the transition and use their operational and sales expertise to then grow the company."

The company's new found strength enabled the Lipson's to buyback Kilmer's stake in the company.  BMO Capital Markets provided advisory services to both Kilmer Capital and the Company. This dramatic transition and modernization is truly a Canadian success story.    

"We like opportunities to back strong management teams to execute well defined plans that create value," says Anthony Sigel, President of Kilmer commenting on the success. "Many of our investments have been predicated on taking regional Canadian companies with a core competency and expanding them globally either by injecting them with growth capital or by helping to finance acquisitions.  There are many interesting companies in the Canadian mid-market with tremendous opportunity but are either undercapitalized or held back by the owner's risk profile. Our challenge is to find those management teams or "free agents" to help us unlock that inherent value.  The team at McGregor did a tremendous job repositioning the company for many more years of growth. I'm proud we were a part of that story."

SOURCE Kilmer Capital Partners Limited

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