SSG Advises MSD Performance in its Sale Z Capital Affiliates
SSG Capital Advisors acted as the exclusive investment banker to MSD Performance in the sale of substantially all of its assets to affiliates of Z Capital Partners. The sale was effectuated through a Chapter 11 §363 process and closed in December 2013.
El Paso, TX-based MSD serves the motor sports enthusiast and professional racing markets where it has been recognized as a leader in performance ignition systems for over 40 years. The company maintains five facilities across the U.S. and one in China and operates through two main business focuses: MSD and Powerteq.
MSD develops and manufactures ignition controls, distributors, drag racing data acquisition units and fuel injection systems under the brands MSD Ignition, Racepak and Atomic. Powerteq includes Superchips, an industry leader in automotive tuning and Edge Products, a manufacturer of in-line devices for diesel powered vehicles.
MSD began a series of acquisitions in 2005 at a time when the dynamics of the market were rapidly changing. Increased competition, improved performance by vehicle producers and the downturn in the economy led to pressure on the MSD’s sales and profitability. In response, the company restructured the organization and implemented several strategic initiatives to grow and diversify its revenue base, rationalize its cost structure, reduce its working capital needs, improve margins and maintain profitability. While MSD was able to maintain healthy margins, the Company had a significant debt burden which constrained liquidity and limited its ability to grow.
After considering a number of options for reorganization, MSD determined that a sale its assets would maximize value for stakeholders. SSG was retained in June 2013 as the company’s exclusive investment banker to market the business for sale.
SSG conducted a comprehensive marketing process which resulted in a wide range of interest from potential strategic and financial buyers. Z Capital’s offer of $78 million was ultimately the highest and best price for substantially all of MSD’s assets.
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Previously on abfjournal: MSD Performance Files Chapter 11 To Find a Buyer, September 9, 2013