McGregor Industries Inc, the 90 year old iconic Canadian hosiery company
buys back shares from Tanenbaum-backed private equity fund, Kilmer
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
For further information:
For more information about Kilmer Capital Partners and McGregor, please visit: www.kilmercapital.com and www.McGregorsocks.com.