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Sussex Wire eyes buys; LOI in place for large deal - CEO
by Deborah Balshem in Ft. Lauderdale
August 6, 2015
Sussex Wire, a private equity-backed manufacturer of engineered micro-components, is actively seeking buys,
said Timothy Kardish, president and CEO.
The Easton, Pennsylvania-based company has a letter of intent signed with a comparably sized business, a deal
that could close within 90 days, according to Kardish. Sussex has revenue between USD 20m and USD 50m, he
said.
Sussex is seeking US companies with microstamping or Swiss machining capabilities, and with management
willing to stay on for a certain amount of time, Kardish added. It is looking at targets up to its own size or
potentially larger and prefers they be based in areas that executives can “drive to or fly to with ease.”
The company plans to use a potential combination of cash, senior debt, subordinated debt and equity rollover re-
investment to fund buys, Kardish said. Multiples in the space are roughly 6x to 8x TTM EBITDA, with typical
EBITDA margins in the high teens to low 20s, according to the executive, who noted Sussex has “above average
EBITDA.”
Through a combination of organic and inorganic growth, Kardish said Sussex believes it can double or triple in
size within the next 24 to 36 months.
The CEO joined Sussex shortly after Pennsylvania-based Argosy Private Equity acquired a majority stake in
the 42-year-old company in May 2012. Argosy initially focused on improving internal processes and systems and
began seeking acquisitions in 4Q14, Kardish noted. An exit for Sussex could be realized in three to four years,
he added.
Sussex specializes in the design and manufacture of custom, cold-formed and cold-headed parts in mini and
micro-geometries to complex and precise tolerances. On average, it sells between 750 million and 1.2 billion
total component parts per year composed of an average of 240 unique parts (stock-keeping units) per month.
The company’s more than 60 Fortune 1000 global customers are mainly in the automotive, aerospace,
healthcare and medical device sectors, with most based in the US or European Union, according to Kardish.
Though not a competitor, Kardish pointed to Precision Engineered Products (PEP), a global manufacturer of
precision plastic and metal components, as a player in a related space that has grown largely through
acquisitions.
Attleboro, Massachusetts-based PEP, which is backed by private equity firms The Jordan Company andNautic
Partners and has USD 60m in EBITDA, is in the midst of a sale process being handled by Piper Jaffray and
Lincoln Financial, as first reported by this news service in March. PEP is not a potential acquisition target for
Sussex, Kardish said.
Prior to joining Sussex, Kardish was CEO of APS Novastar, where he led a successful turnaround before exiting
to a strategic buyer, and president of Labsphere, an X-Rite company that was acquired by Halma, plc.
Sussex’s corporate advisors include law firm Stevens & Lee and accounting firm RKL.