Industrial Products

Scotchman Industries

Leading manufacturer of hydraulic ironworkers, cold saws, and hydraulic presses.

Transaction Overview

  • Hennepin represented Scotchman Industries in its recapitalization by Emko Capital.  Based in Philip, SD, Scotchman is a leading manufacturer of hydraulic ironworkers, cold saws, and hydraulic presses.
  • Emko simultaneously recapitalized Steelmax Tools.  With operations in Colorado and Pennsylvania, Steelmax supplies magnetic drills, plate and pipe bevellers, and trackless and track-mounted welding carriages.
  • Scotchman and Steelmax are now owned by a holding company called SMX Industrial Solutions.  SMX will leverage Scotchman’s and Steelmax’s product portfolios, technology development, and additional acquisitions to give customers an expanding portfolio of steel fabrication tools and solutions.

Key Observations

  • The second-generation owners of Scotchman decided to explore liquidity alternatives after owning and operating the business for 45 years.  They retained Hennepin after interviewing several investment banks.
  • The President wanted to retire at closing and there was no successor in place.  Recruitment of new leadership was problematic because Philip, SD is a very small town.  We needed a buyer that could surmount this challenge.
  • An employee stock ownership trust owned a significant portion of the company’s equity.  This added complexity to the sale process.

Drivers of Interest

  • Broad portfolio of metal fabrication machinery and replacement parts.
  • High levels of customer satisfaction.
  • Commitment to quality and innovation.
  • Experienced and loyal junior management and employees.
  • Long history of profitable and steady growth.
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Hennepin Partners LLC