Red Diamond Capital and Century Park Capital Partners Acquire Hi-Tech Rubber, Inc.
--Private Equity Firms Contribute Unique Resources to Success of Deal--
NEW YORK and LOS ANGELES (March 15, 2004) – Red Diamond Capital and Century Park Capital Partners, private equity firms based in New York and Los Angeles, respectively, jointly announced today their recent acquisition of Hi-Tech Rubber, Inc., a leading molder of precision elastomeric components based in Anaheim, California.
Consistent with the similar investment philosophies of Red Diamond and Century Park, Hi-Tech Rubber's current management team will remain with the company and have invested in the transaction. Ken Lester, Hi-Tech's chairman and chief executive officer, re-invested a portion of his proceeds from the sale back into the company's equity and will continue as Hi-Tech's CEO. "Our new financial partners offer tremendous financial and strategic resources for Hi-Tech Rubber," said Lester, "We now have all the pieces in place to build Hi-Tech into a world leader in the precision rubber molding sector." A number of the company's key senior managers also invested in the transaction and will participate in Hi-Tech's equity incentive plan.
"We're very optimistic about Hi-Tech Rubber's growth prospects," noted Mark Kammert, a managing director of Red Diamond Capital. "The market for the company's products is expanding rapidly, particularly in the medical sector. As the first step in the company's strategic plan, we expect to fund Hi-Tech's expansion into a major new clean room molding facility in Phoenix, Arizona in 2004."
According to Marty Jelenko, managing partner of Century Park Capital, "Hi-Tech is already evaluating add-on acquisitions and opportunities to enter new product lines to take advantage of its strong, longstanding relationships with major customers. We're fully committed to supporting the management team's growth initiatives."
Red Diamond and Century Park each contribute unique strengths to Hi-Tech Rubber's business. Red Diamond's affiliation with Mitsubishi Corporation was a key factor in the decision by Hi-Tech's former owner to select Red Diamond as a financial partner. Mitsubishi offers Hi-Tech a variety of strategic resources, including advantageous raw material sourcing, international marketing assistance and expertise in the Asian and European markets for molded rubber products. Several members of Century Park's Executive Council, a team of seasoned operating executives, will work with Hi-Tech's management to improve the company's strategic planning, manufacturing and sales processes.
Founded in 1982, Hi-Tech recorded sales of over $30 million in 2003 and in recent years has recorded revenue growth averaging 10% a year. Because of Hi-Tech's proprietary engineering expertise, efficient high volume production capabilities, competitive pricing and superior customer service, the company is a sole source supplier for over 80% of the components it manufactures.
Hi-Tech uses liquid silicone rubber, organic rubber compounds, and thermoplastic elastomers as raw materials to manufacture complex, difficult-to-mold parts for critical customer applications. The company produces approximately two-thirds of its components for medical device manufacturers, with the balance for customers in the technology and industrial sectors.
About Red Diamond Capital
Formed in 2002, Red Diamond Capital is an independent $150 million private equity fund that invests in middle market distribution, manufacturing and service businesses in North America. With its committed capital provided primarily by Mitsubishi Corporation, Japan's leading trading company, through its U.S. subsidiary, Mitsubishi International Corporation, Red Diamond offers a unique mix of strategic resources, industry-focused capital and management expertise to fuel the growth of its portfolio companies.
"Red Diamond has already completed two deals this year," stated Bret Russell, Red Diamond's chief executive officer. "Both investments drew upon the firm's ability to provide strategic direction for management through Red Diamond's CEOwners® Program, as well to tap Mitsubishi Corporation's global resources."
About Century Park Capital Partners
Century Park Capital Partners is a committed private investment fund that specializes in making $5 million to $15 million long-term equity investments in profitable, growing companies with revenues ranging from $20 million to $200 million. Century Park most commonly invests in closely-held, entrepreneurial companies or divisions or subsidiaries of larger companies. Century Park's fundamental investment approach is focused on developing solid relationships with experienced in-place management and entrepreneurs of profitable companies. Century Park provides capital, financial expertise and research to its portfolio companies to encourage long-term growth. Headquartered in Los Angeles, Century Park can be found on the web at www.cpclp.com.
