Daily News: March 9, 2012

Sun Capital Affiliate Sells Fluid Routing Solutions to Park-Ohio

Sun Capital Partners, Inc., a private investment firm specializing in leveraged buyouts and investments in market-leading companies, announced the signing of a definitive agreement to sell its affiliated portfolio company Fluid Routing Solutions (FRS), a designer and manufacturer of fuel management systems and hose extrusion products for major automotive and industrial OEMs. FRS will be purchased by Park-Ohio Industries, Inc., a subsidiary of Park-Ohio Holdings Corp. The transaction is expected to close by March 30, 2012.

Headquartered in Southfield, MI, FRS sells to automotive and industrial customers in North America, Europe and Asia. FRS was initially acquired by a Sun Capital affiliate in 2007 in a corporate carve-out transaction. At the time of acquisition, FRS had negative cash flow and double-digit EBITDA losses. Despite significant improvements in working capital and right-sizing the cost structure, economic headwinds impacting the entire automotive industry hindered further progress. In March 2009, FRS entered a voluntary bankruptcy process in which an affiliate of Sun Capital provided the debtor-in-possession financing, worked very closely with customers and suppliers to ensure stability and continuity, and reacquired the business through a 363 bankruptcy sale process.

Restructuring efforts at FRS continued, achieving major gains in production and engineering efficiency, the consolidation of various manufacturing facilities, and focused cost-reduction initiatives across the business. As demand in the automotive sector recovered, revenues have increased, resulting in corresponding improvements in EBITDA.

“By carrying out a top-to-bottom restructuring, leaving behind unprofitable business lines and focusing on the viable parts of the business, FRS was well positioned to make gains when the auto industry rebounded,” said Marc Leder, co-CEO at Sun Capital Partners.

Affiliates of Sun Capital and FRS leveraged the expertise of investment bankers Cliff Roesler and Kevin Marsh of Angle Advisors, whose trusted relationships and deep industry knowledge facilitated a successful sale process. Kirkland and Ellis provided legal advice.