Phillips & Temro Industries

Company Overview

Leading global supplier of highly engineered diesel and gasoline engine components.

Transaction Overview

The family office owner of Phillips & Temro (“PTI”) decided to sell the company through an auction process. MPE’s Investment Professionals differentiated themselves due to their focus on high-value manufacturing and experience helping companies expand operations globally.

Transaction Outcome

MPE’s Investment Professionals worked proactively with management to weather the economic downturn in 2008-2009 while continuing to make strategic investments, including globalizing the company’s operations. Following the recession, PTI rebounded strongly and achieved record profitability, before being sold to a financial buyer in 2012.

Original Investment Thesis
  • Market leadership with dominant position in both air intake heaters and cold start heaters for heavy-duty truck and automotive markets in North America
  • Highly engineered components supported by patent protection and unique design creates high switching barriers
  • End market demand driven by shift towards global production, tightening environmental regulations, and on-road fleet age/replacement cycles
Company-Building Approach
  • Supplemented existing management team through new hires and internal promotions
  • Recruited CEO with prior executive experience at John Deere
  • Recruited CFO with extensive industry experience at Fortune 100 companies
  • Internally-promoted and recruited Divisional VPs to oversee international expansion and optimize manufacturing footprint
  • Achieved strong organic growth by penetrating aftermarket and high-growth Asian markets
  • Invested in new technologies for electric and hybrid vehicles to capture next-generation platforms
  • Completed strategic acquisition in the UK to expand PTI’s product line, geographic presence, and end market revenue base
  • Optimized manufacturing operations by consolidating North American footprint, integrating UK acquisition, and launching greenfield China facility
  • Developed strategic outsourcing relationships for high-volume components in Asia
  • Improved working capital by instituting Kanban/pull supply to reduce inventory investment
  • Employed conservative capital structure to allow vigorous pursuit of numerous growth initiatives
  • Successfully restructured balance sheet in 2008-2009 to increase liquidity and financial flexibility
  • Professionalized financial planning and analysis by identifying and tracking standardized KPIs and implementing best management processes globally
Eden Prairie, MN
High-Value Manufacturing (Auto & Truck)
Transaction Type:
Family Office Buyout
Investment Date:
December 2004
Exited in February 2012