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11/06/2000
By: David Prizinsky
RockWood Equity Partners, a private equity firm that's setting up a Cleveland office, has bought Solon-based Hunter Manufacturing Co. and plans to use it as a base for further acquisitions.
Hunter, a diversified manufacturer with 75 employees in Solon and sales of $22 million in 1999, makes mobile heaters and air filtration systems as well as components for diesel engines. The new owners plan to make more acquisitions that will augment Hunter's product mix, said Owen W. Colligan, one of the founders of RockWood.
Mr. Colligan said the timing is right to make acquisitions because many of the founders of small manufacturing companies are nearing retirement age. "Our sweet spot is companies with sales of between $10 and $50 million a year," said Mr. Colligan, who formed RockWood a year ago with Brett R. Keith, a classmate at Harvard Business School. Hunter is RockWood's first acquisition.
Terms of the Hunter acquisition were not disclosed. Mr. Colligan currently is working from an office at Hunter's Solon plant. Mr. Keith is based in the New York City area. Mr. Colligan said RockWood is considering sites for a permanent office in the Cleveland area. He said the majority of RockWood's investors are from Cleveland. The investors include both investment companies and high net worth individuals, Mr. Colligan said.
Hunter's air filtration systems are produced by Hunter Protective Systems, a subsidiary in Chula Vista, Calif. The company's diesel engine components, including automatic oil change systems for the trucking industry, are produced at its WEBB Enterprises subsidiary in West Fargo, N.D. The company also operates a small plant in Mansfield and employs a total of 140.
The 63-year-old company's heaters are sold to the commercial market and to the U.S. Department of Defense, which Hunter has supplied since World War II. Hunter was acquired in 1974 by Thomas Gruber and I. Eugene Strine. Mr. Strine will remain with Hunter as chief executive officer. Mr. Gruber retired from the company Oct. 27.
Mr. Strine said Hunter hired NatCity Investments Inc., an investment banking unit of National City Corp., last May to find a buyer and clear the way for Mr. Gruber's retirement. "We see the potential for a tremendous increase in sales" under Hunter's new ownership, Mr. Strine said. He said he expects the company to add several employees to its engineering and research-and-development departments before the end of the year, and will look to pursue new military orders for heating and chemical filtration systems. "It's exciting to be working with two young guys from Harvard Business School," Mr. Strine said.
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