Case Study

Becker Underwood, Inc.

At our initial meeting with Century Park Capital, they told us that they invested in individuals, collaborating with management to build businesses. They did not pretend to be experts in our industry, but did promise to provide us with capital and guidance. They impressed us with their honest, down-to-earth approach. After spending four years with them as our equity partner, we were even more impressed.

Roger Underwood

Former CEO & Chairman, Becker Underwood, Inc.

Overview

Becker Underwood, Inc. is a leading manufacturer of environmentally-friendly, specialty chemical products for the amenity turf, lawn care, aquatics, seed, and landscaping markets. Century Park Capital completed a structured majority recapitalization of the company to accelerate its growth and enable its two owners to diversify their personal holdings. After completing eight add-on acquisitions and increasing earnings by over four times, the company was successfully sold to a larger private equity firm.

Highlights

  • Key supplier of seed applied biological products
  • Global footprint
  • World-class R&D capabilities
  • Broad product offering

Details

Headquarters – Ames, Iowa
President & CEO – Peter Innes
Industry – Agribusiness
Website – beckerunderwood.com

The Situation

In 2000, Century Park partnered with the founders and owners of Becker Underwood, a leading manufacturer of environmentally friendly specialty chemical products, through a majority recapitalization. Becker Underwood’s two founders and owners sought to realize partial liquidity to diversify their asset base and raise additional capital to pursue strategic acquisitions.

How We Helped

Century Park’s investment in Becker Underwood met the founders’ main goals of generating liquidity while maintaining a substantial share of the business with significant voting rights. Century Park also structured the transaction in a way that provided the capital necessary for future growth. In addition, Century Park brought along the experience and capital needed to help Becker Underwood complete the acquisition of MicroBio, a UK based producer of agricultural specialty chemicals. Subsequently, Century Park and the company’s management identified and completed an additional seven strategic acquisitions in four years. These acquisitions allowed Century Park and Becker Underwood’s founders to realize their combined goal of creating a global player in the specialty agricultural chemical industry through adding a global distribution network, new products and additional capacity. By the end of Century Park’s investment in Becker Underwood, the company had grown from a single facility in Iowa to multiple locations in seven countries.

The Result

In conjunction with Becker Underwood, Inc’s partnership with Century Park, the company’s revenue tripled and its EBITDA quadrupled. Century Park exited the business through a sale to a financial buyer, which allowed both Century Park and the company’s founders to realize liquidity. The sale to a financial buyer also ensured that Becker Underwood’s management team was able to remain in place and continue to grow the business. Some of the key initiatives that facilitated this growth included:

  • Evaluated numerous potential strategic acquisitions and closed eight add-on acquisitions.
  • Obtained financing for acquisitions and business expansion.
  • Evaluated the feasibility of new markets and provided support in expanding facilities.
  • Selected Neil Martin, a Century Park executive council member, as a board member of Becker Underwood. Mr. Martin brought his experience in the industry to Becker Underwood and helped drive the Company’s success.
  • Implemented a management incentive stock option plan for the then existing and new management.