Niche Printer is Next Page for Michigan Fund
With its fifth acquisition via the Michigan Prosperity Fund, Blackford Capital is continuing its mission of growing businesses in the state.
Grand Rapids–based private equity firm Blackford Capital has its eye on boosting Michigan’s economy, pursuing the vision of its founder and managing director, Martin Stein. The firm’s latest achievement in this mission? The acquisition of Dickinson Press Inc., a niche book manufacturing company that prints Bibles, trade books, directories, and other materials.
Blackford’s Michigan Prosperity Fund, which targets majority-control investments of industrial companies with revenues between $20M and $100M and EBITDA between $2M and $10M, was launched in 2012 when the firm started to identify a large number of private equity transactions occurring in the state of Michigan.
“We typically are in the top 10 most active states for private equity,” says Stein. “Yet 85 to 95 percent of the deals are done by private equity firms outside the state of Michigan. Based on that awareness, we said that we were interested in creating a fund that was dedicated exclusively to investing in family-owned Michigan businesses.”
The Michigan Prosperity Fund is entirely funded by private individuals and family offices, which makes Blackford one of the few firms—if not the only one—in the country to sponsor a state-focused private equity fund. Dickinson Press, a 130-year-old printing business based in Grand Rapids, is Blackford Capital’s fifth investment from the fund.
“It’s got a great brand name, very strong culture, and a solid management team,” says Stein. “We felt that the niche focus on lightweight paper in the religious printing industry was a great differentiator.”
Stein feels that with the addition of Blackford’s capital and expertise, they will be able to help grow Dickinson Press. “We would love to—over the course of the next five years—increase the revenues of the business three times to five times,” he says. “We would like to be a predominant player within the Midwest and have several different industry segments that we focus on—religious printing being one of them.” Blackford Capital also has its eye on neighboring industries where thin-print paper is used.
Blackford’s first investment of capital from the Michigan Prosperity Fund was in Custom Profile, which manufactures plastic products. “We’ve increased the revenue at the company by roughly 60 percent, and we’ve done two recapitalizations of the business as we have deleveraged the company over time. So it’s done extremely well,” Stein says.
Other companies that received capital investments from the Michigan-centric fund include Grand Transformers, Burgaflex, and Mopec—a manufacturer of biopsy and autopsy tables and distributor of medical products and consumables. Blackford Capital has increased the revenue at all of the companies within the short period of time that they’ve been in the firm’s portfolio.
“We recently completed an acquisition of another business in Germany that gave us a presence in Europe,” Stein says of Blackford’s experience with Burgaflex since acquiring the business in 2014. He adds that the firm expects to acquire or open a facility in Latin America in the next 18 months, giving Burgaflex a presence in three countries and the ability to serve three continents.
Outside of the Michigan Prosperity Fund, the firm also has a more broadly focused fund, National Growth Practice, which deploys between $3M and $7M of equity in each investment. The fund currently has three portfolio companies, all of which are middle-market manufacturing, distribution, and services companies.
On top of that, Blackford Capital recently started the fundraising process for Michigan Prosperity Fund II, which has a $100M target that will further the firm’s goal of growing companies within Michigan. “We expect a great deal of repeat investors in the fund and have gotten very positive feedback to that effect thus far,” says Stein. In addition to the firm’s existing investor base, he adds that there is the expectation of participation from new institutional investors as well.
“I’ve always had an affinity towards operations and more industrial businesses,” says Stein. “So those are the types of companies that we focus on [at Blackford Capital], and we are looking to improve the operational capabilities of the companies in which we invest so that we can accelerate their growth. It’s not atypical for us to—over the course of a five-year period—double, triple, quadruple the revenues of a business. And we obviously hope to increase the earnings by more than that.”
Martin Stein of Blackford Capital discusses the firm’s latest acquisition of Dickinson Press, a 130-year-old niche printing company, and how Blackford aims to help the Michigan economy through its Michigan Prosperity Fund.