Management Buyout:

Retiring Owner

Velvac Holdings, Inc.
New Berlin, Wisconsin

Type of Business: Exterior vehicular mirror products and vision technology systems


Situation:
In 2005, Jeffery Porter, an independent equity investor and veteran operating executive, approached Prospect Partners with the opportunity to acquire Velvac, Inc., a manufacturer and supplier of exterior mirror systems and other component parts primarily to the recreational vehicle (RV) industry, from its retiring owner. Though a dominant player with high brand recognition in the RV market, Velvac was undermanaged, with a skeletal management team, an inefficient new plant in Mexico, and a slow product pipeline. Prospect Partners saw an exciting opportunity to back Mr. Porter, an outstanding operating executive, to improve Velvac's operations and diversify the business into other appealing specialty vehicle markets. With the transaction, Mr. Porter became Velvac's CEO and day-to-day leader.


Our Strategy:
We sought to build Velvac into a major player in the broader vehicular exterior mirror industry by capitalizing on the company's brand awareness in the automotive aftermarkets channel to add new products and reach new customer segments, a move that would also help protect the company from cyclical risk in any specific sector. Velvac needed significant new management talent, an experienced team able to deliver substantial manufacturing operations improvement, strong channel relationships, and a focused and prescient product engineering discipline. Accelerating the pace of product innovation and making strategic add-on acquisitions would play key roles for Velvac in entering new specialty vehicle markets and bringing cutting-edge products to them.


Results: Velvac successfully evolved from an RV-centic parts supplier to become the leading vehicular vision systems provider in multiple specialty vehicle markets. Under Mr. Porter's stewardship, Velvac hired world-class management teams at both the corporate office and the company's manufacturing facility in Reynosa, Mexico, implementing lean manufacturing practices that turned the company into a highly efficient Tier 1 manufacturer of exterior vehicular mirrors and camera-enabled vision systems. Notably, Mr. Porter guided the company through the Great Recession, a crisis especially cruel to the RV industry. During the depths of the downturn, Velvac was still able to play offense and invest in products and people, including acquiring two businesses. Velvac also added desirable vision products for new specialty end user segments, including Class 8 trucks, garbage trucks, airport shuttle buses, ambulances and firetrucks. Additionally, the company developed proprietary technology for camera-enabled vision systems for many vehicle types, and brought to market a sophisticated connected vehicle technology, called Road-iQ™, that provided significant safety and security features. During Prospect Partners' investment period, Velvac experienced significant growth in revenue and an even greater increase in EBITDA.


Exit:
In 2017, Prospect Partners sold its interest in Velvac for a significant gain to a public company.


Our Philosophy: To provide financial backing and strategic guidance to support a savvy operating executive and his management team in the execution of their strategic plan.

Back to Case Studies

 

"Prospect Partners supported Velvac in every step of our sometimes bumpy journey from a highly specialized manufacturer to an innovator and top player in the broader vehicular vision systems market. With an expanded product line, new technologies, and wider distribution, we substantially strengthened our competitive position and experienced many years of rapid growth as a market leader.”

— Jeffery Porter, CEO,
Velvac, Inc.

 

Printable Velvac case study
Velvac company profile
Velvac press releases