Seidler Equity Partners
Case Studies

Management Buyout

Magnet, LLC – 1992 to present

Company History

Magnet was founded in 1984 as a manufacturer/decorator of flexible molded magnets for advertising purposes to the promotional products industry. Organizations from real-estate agents to pizza delivery companies utilize Magnet’s products as advertising giveaways to current and potential customers. Over time, the company grew to become a key supplier serving the magnet niche in the promotional products industry. By 1993, Magnet’s founder wanted to sell the business and transition into retirement.

Transaction Description

Seidler Equity Partners purchased Magnet, Inc. in a transaction that allowed for the following:

  • A cash buyout of the founder.
  • A structured, planned transition of the operations from founder to management team.
  • An equity incentive program for management.
  • Long-term growth capital for organic and acquisition growth.
Post Transaction Highlights

Following the transaction, Magnet continued to increase its market share within its industry niche, more than doubling in size from 1992 to 1996. Although Magnet was determined to continue this growth rate, it was limited within the magnet niche by its large market share. Therefore, in 1997 the company investigated entering other niche promotional markets via acquisition. Magnet’s management invested time and capital in its systems and infrastructure while SEP organized an acquisition team consisting of company management, SEP personnel and outside advisors to locate, evaluate, buy and integrate acquisition targets.

From 1998 through 2000, Magnet acquired and integrated five additional companies serving the promotional products industry, each a category leader within its particular product line. Since SEP’s original investment, Magnet has grown its revenue and EBITDA by over 600%. Today, Magnet and its affiliates are among the argest supplier serving the $13-billion promotional products industry.

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