Case Study:

American Commercial, Inc. - Exclusive Sale

Situation

• American Commercial, Inc., based in Bristol, Virginia, is the leading North American designer and manufacturer of underground steel supports used primarily in the underground construction and mining industries.
• ACI had been approached by DSI USA, a subsidiary of Munich, Germany based DYWIDAG-Systems International. DSI is a global manufacturer of products for the mining and tunneling industries and a portfolio company of European private equity firm Industri Kapital.

Objective

• The shareholders of ACI thought that DSI was an ideal acquirer for their company, but recognized that an M&A firm such as Matrix would be needed to keep DSI “honest.”

Solution

• The shareholders of ACI hired Matrix to negotiate and structure the transaction with DSI. By hiring a professional advisor, the shareholders were able to demonstrate their commitment to closing a deal while also sending the message that other potential buyers were interested in becoming part of the sale process.
• Matrix was able to use the threat of an auction to keep DSI “honest” throughout the transaction process, and ultimately achieved a significant premium over traditional capital equipment valuations.