PRECISION MACHINE AND MANUFACTURING

In March 2014, we along with an institutional investor backed the existing management team of Precision Machine and Manufacturing in the acquisition of the company from its retiring owner. Precision is a Eugene, Oregon based manufacturer of material handling equipment used to move granular materials with a focus on the most demanding, complex and abrasive applications. Industries served include forest products, pulp and paper, biomass, cement, aggregates, coal fired utilities and mining. Precision’s products often sell for as much as a 30% premium over competitive products due to their unique design, longevity and life cycle economics. Even so, given the focus on demanding applications, repair and refurbishment of worn-out equipment is an important part of their revenue stream.

In addition to investing a significant amount of our own personal capital, Socius brought in an institutional investor to provide the majority of the capital on pari pasu terms with our investment. Socius and its institutional partner committed to all of the preferred stock and subordinated debt. A senior lender provided a term loan amounting to approximately 1.5x trailing EBITDA. We and our institutional partner own a controlling interest in the business. After several years of ownership we brought in a new CEO who has led the company to record revenue levels.