Sometimes when a well-known brand that has been around for a long time gets tired, it needs fresh financial and operational resources. This is where investors come in. Even though overall M&A activity is slowing down and buyers are being cautious, Flacks Group doesn’t see it that way.
Flacks Group is a Miami-based special situations-focused investment firm that was founded in 1985. The firm mainly focuses on the industrials and manufacturing sectors, among others. Flacks Group likes carve-outs, spinoffs and divestitures of non-core, underperforming businesses of large corporations.
In environments like the current one, strategics often look to divest non-core parts of their business to focus on their main business lines.
On Friday, Flacks Group said it acquired paint maker and seller Kelly-Moore Paint Co. The target, founded in San Carlos, Calif. in 1946, is one of the nation’s largest independent paint companies, with more than $400 million in annual revenue. The company distributes products through 157 company-managed retail stores.
The acquisition is part of Flacks Group’ overall investment strategy to seek deals in the industrials sector. The firm says its industrials group is on pace to exceed $1 billion in revenue in the next two to three years. Some of its other investments in the space include: Pleuger Industries, a German-based manufacturer and supplier of motors and pumps; and Zippel, a producer of industrial cleaning technology for parts that are used in the automotive and aerospace sectors, also headquartered in Germany.
It is an interesting time to invest in industrials, as dealmakers are telling us that buyers in the sector are more cautious than they have been in recent years. What’s your view on this sector? Let me know at [email protected].
– Demitri Diakantonis