Where Can I Find a Steady Source of Capital for Good Times and Bad?
Established in 1978, Century Mold grew from a modest tool making business into an 800-employee, full service supplier of complex, highly-engineered vehicle parts to the automotive industry. PNC Mezzanine Capital (PNC MC) provided a growth investment to the company and was a steady source of capital and management expertise through the depths of the Great Recession and beyond.
Under new entrepreneurial ownership in 2003, Century Mold transformed itself into an aggressively-growing supplier to the automotive industry. In 2005, the company had acquired more than $20 million of new annual business ready to go into production, and needed a capital provider that would help them upgrade one facility and build an entirely new facility. They also were looking for a partner that could help them continue on their growth path and provide additional capital when they needed it. PNC MC provided a $16 million growth investment in the form of flexible subordinated debt that would allow the company to invest in needed capital spending, while providing less dilution than equity financing.
For two years post investment, PNC MC worked with management to execute the outlined growth plan and work through the myriad issues that come with building a new facility and launching hundreds of new products. However, with the onset of the Great Recession and related turmoil in the automotive industry, PNC MC and management had to switch gears in 2008 to address a 50% decline in the company’s end market demand. PNC MC worked closely with the company’s management to cut costs, right-size the balance sheet and reassure the customer and supplier base. PNC MC also deferred interest, reset and waived covenants and put additional capital into the business to support expansion and productivity enhancements. At the same time, PNC MC also made Century Mold’s senior lender more comfortable with its prospects. The strategy switched back to growth mode in 2010, as Century Mold was now one of the best auto suppliers financially and operationally. Coming out of the Great Recession, the company was poised to take market share and aggressively expand.
After battling through the Great Recession, the company not only rebounded, but flourished. Century Mold became a best-in-class supplier in the auto industry, with six locations throughout North America, including expansion into Chihuahua and Queretero, Mexico. While many of their competitors failed or were unable to keep up with the rapid turnaround in the auto industry, Century Mold was positioned to capitalize on the growth and doubled in size. With the rapid growth and solid capital structure, the company’s management team was able to refinance PNC MC’s position in the company in 2014.
“We originally were looking for a partner that could support our growth, then we quickly needed someone to help us work through the Great Recession and the sky falling around us. PNC Mezzanine Capital never panicked and was always supportive, rolling up their sleeves alongside us to work through everything and always doing the right thing for the company. We couldn’t have asked for a better partner to support us both in growth mode and when we had to tighten our belts. It was an eight-year partnership that led to a great outcome for both sides.”
CEO Century Mold