​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.