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​NH Business: New Owners of Bow Plastics Machine Shop Invests for Growth

By Mike Cote, New Hampshire Union Leader

December 10, 2022

 

AFTER RUNNING PlasTech Machining & Fabrication for more than 20 years, Lou Ferriero was ready to sell the Bow company, which makes precision plastic parts for a variety of industries.

 

"I had just had enough. I had been doing it for a lot of years," Ferriero said Thursday at the company's 10,000-square-foot plant on Dunklee Road.

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Meanwhile, CNC (computerized numerical control) machines and lathes were producing customized parts as technicians monitored their progress. You could barely hear the rock music above the roar of the machinery.

 

Steve Trotta and his two partners were on the hunt for exactly the kind of business Ferriero and his wife built from scratch - a small manufacturing company that was modern, profitable and primed for growth.

 

Since buying the business in November 2020, Trotta and his investment group, DelCam Holdings, have doubled the workforce and the sales.

 

They've also invested $500,000 to buy a few additional machines, including a robot that is helping the crew keep up with customer demand. The team includes 16 machinists and six support staff.

 

PlasTech's post-deal growth follows a predictable pattern, though it's growing faster than most, said Ken Schaefer of Business Transition Strategies, a mergers and acquisitions firm that helped Ferriero find a buyer.

 

"That's the goal, and that probably happens 90 percent of the time to some degree," Schaefer said by phone Friday. "This is two years later, and they've doubled it. I can only think of one other at the top of my head that was that quick.

 

"The goal of the buyer is to do exactly that - to grow the company. And to grow the company the workforce has to grow along with (it). That's what every buyer strives for," he said.

 

Business Transition Strategies, which operates out of Concord, N.H., and Andover, Mass., focuses on the lower-mid market, generally private companies with revenues between $2 million and $20 million.  Schaefer presented Ferriero with three possible options during a process that was delayed for a few months by the COVID-19 pandemic.

 

"What our goal is to provide those options. It's up to the clients to pick," Schaefer said. "There could be times where it's none of the above. It's their business."

 

Ferriero was contracted to remain with the company as a consultant for six months after the sale - a typical scenario with M&A deals. He's still working there more than two years later, though he's primed to retire at the end of the year.

 

"I basically picked and chose who I wanted because I wanted to make sure," he said. "This is my baby and I didn't want to have someone drive it into the ground on me."

 

About 50 percent of PlasTech's business comes from medical device makers, the rest from a variety of industries, including semiconductors, marine applications, electronics and radar/sonar.

 

The company was the first of three small manufacturing businesses DelCam bought over several months in 2020 and 2021.

"When we were looking around at target acquisitions, this shop was impeccable compared to some of the other machine shops," said Trotta, an Exeter native based in Newton, Mass. He worked for 11 years for Fidelity Investments before leaving the company in 2017 to pursue deals in real estate, and since 2019, in advanced manufacturing.

 

The private equity group, which includes about 20 investors, acquired two complementary companies in Massachusetts, one that fabricates steel and one that specializes in plastic injection molding.

 

Together, the companies have about 250 customers, primarily in New England.

 

DelCam is already working on a second investment fund to buy a few more companies, again targeting first-generation family businesses that are ready to sell. The goal will be the same as it was for first portfolio of companies.

 

"We had a specific idea in mind when we started our fund, and the idea is to quadruple these companies in size, and even more than that, over a period of 10 years," Trotta said.

 

He has high hopes for the resurgence of manufacturing in the United States.

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"Our biggest opportunity is in our own backyard, just being able to grow our existing customer base with one of our three shops," he said.

CONTACT US

ADDRESS

DelCam Capital, LLC

50 Mellen Street

Hopedale, MA 01747

Email: STrotta@DelCamHoldings.com

Tel: 617-281-7038

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The information contained herein is confidential information regarding DelCam Capital, LLC (“DelCam”). By accepting this information, the recipient agrees that it will, and it will cause its directors, partners, officers, employees, attorney(s), agents and representatives, to use the information only to evaluate its potential interest in the investments and strategies described herein and for no other purpose and will not divulge any such information to any other party. Any reproduction of this information, in whole or in part, is prohibited. These contents are proprietary information of DelCam and may not be reproduced or disseminated in whole or part without the prior written consent of DelCam. Each person accepting this document hereby agrees to return it promptly upon request. General solicitations, prospecting by mail and advertising are strictly prohibited.

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The information contained herein has been prepared solely for informational purposes and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or to participate in any trading strategy or potential fund to be sponsored by DelCam. If any offer of securities is made, it will be pursuant to a definitive offering memorandum prepared by DelCam that contains material information not contained herein and which supersedes this information in its entirety. Any decision to invest in the strategy or fund managed by DelCam should be made after reviewing such definitive offering memorandum, conducting such investigations as the investor deems necessary and consulting the investor’s own investment, legal, accounting and tax advisors in order to make an independent determination of the suitability and consequences of an investment. An investment in DelCam’s strategy involves significant risks, including loss of the entire investment.

 

All performance and internal rates of return contained herein are subject to revision by DelCam and are provided solely as a guide to current performance expectations. Past performance does not guarantee future results. Actual results may vary. As of the date hereof, DelCam has not made any investments. There can be no assurance that DelCam’s strategy will achieve any targets or that there will be any return on capital. Historic performance is not necessarily indicative of future performance, which could vary substantially. The performance figures contained herein are provided on a net basis. The performance is calculated in U.S. dollars.

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As used herein with respect to an individual investment, “IRR” is intended to represent the net compounded annual internal rate of return on the realized investment. The IRR is calculated from the time each investment is made until the date such investment was disposed of, fully or partially, and is based on the aggregate capital contributions made to, and on the aggregate realized proceeds (including all cash received from the disposition of the investment and any other cash received from the investment, including payments of principal, interest, dividends, if applicable) from, the respective realized investment.

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The information presented herein, including, but not limited to, DelCam’s investment experience, returns or performance, investment strategies, risk management, market opportunity, representative strategies, portfolio construction, capitalizations, expectations, targets, parameters, guidelines, and positions may involve DelCam’s views, estimates, assumptions, facts and information from other sources that are believed to be accurate and reliable and are as of the date this information is presented—any of which may change without notice. DelCam has no obligation (express or implied) to update any or all of the information contained herein or to advise you of any changes; nor does DelCam make any express or implied warranties or representations as to the completeness or accuracy or accept responsibility for errors. The information presented is for illustrative purposes only and does not constitute an exhaustive explanation of the investment process, investment strategies or risk management.

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Certain information contained in the presentation constitutes forward looking statements which can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “target,” “project,” “estimate,” “intend,” “continue,” or “believe,” or the negative thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of DelCam may differ materially from those reflected or contemplated in such forward-looking statements.

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Investments in DelCam’s strategy or fund are not deposits or obligations of, or guaranteed or endorsed by, any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other governmental agency.

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No person (other than DelCam and its principals and employees) has been authorized to make any statement concerning DelCam and any such statements, if made, may not be relied upon.

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