Hayes Brake is now an employee-owned company operating under the name HB Performance Systems after a management buy-out completed June 10. The MBO was led by the existing nine-member management team and funded by Nautic Partners, a private equity firm with $1.8 billion of capital under management. Previously, Hayes was owned by The Brenlin Group Inc., of Akron, Ohio. Financing was also provided by M&I Bank, LaSalle Bank, and Chase Bank.
HB Performance Systems will continue to design and manufacture custom brake systems for the motorcycle, bicycle, power sports, and off-road markets. The management team also stated that it plans to expand into additional ventures as the opportunities appear.
Net revenue was “nearly” $100 million in 2004 and the company plans to continue its recent growth rate of doubling in size over five years. Financial details of the deal were not disclosed, but deals in the this industry generally range from 0.9X to 1.1X sales, putting the likely purchase price in the $90-110 million range.
HBPS management said that the decision to rename the company “better reflects the scope of the business, now and in the future.”
Moving forward, the company will operate four distinct divisions – Hayes Bicycle Group, HB Motorcycle Group, HB Powersports Group, and HB Specialty Products Group. HBPS claims Arctic Cat, Decathlon, Caterpillar, Giant, Harley-Davidson, John Deere, Kona, Polaris, Simplicity, Specialized, Trek, and Textron as key OEM customers and caters to a wide range of after market suppliers as well.
Rand McNally, president & CEO; Rod Fostner, chief financial officer; Russ Dudan, vice president of innovation and advanced development; Jim Ferrero, vice president and general manager of the HB Motorcycle Group; Laura Johnston, vice president of human resources; Rhonda Kirkwood, vice president and general manager of the Hayes Bicycle Group; Peter Nelson, vice president and general manager of the Powersports and Specialty Products Groups; Scott Payne, vice president of operations; and John Warczak, vice president of materials and systems make up the new ownership team.
In a prepared statement, Fraser Preston, a VP at Nautic Partners, said, “We are happy to have the opportunity to partner with Rand McNally and his team. HB is the top manufacturer in several niche markets, with highly engineered products serving a premier customer base. The company has seen strong growth in recent years and we believe that there are significant future opportunities through both add-on acquisitions and new product development.”
Local papers are reporting that HBPS operations will remain in Mequon, WI where the company employs roughly 350 people.