Midwest Growth Partners, a seven-year-old private fund manager headquartered in West Des Moines, has entered the eastern Nebraska market by its add-on investment in Superior Metal Products, a Sarpy County CNC machining firm. MGP Partner Ben Fogle said SMP will join Van Becelaere Machine Works, based in Pittsburg, Kansas, as part of a precision machining platform supported by MGP.
“With many of these transactions what we’re doing is preserving a legacy,” said Fogle, who opened MGP’s Omaha office in January 2020.
Fogle, an Elkhorn resident and 20-year veteran in the fiduciary investment management field, said he’s looking to hire two additional analysts at MGP’s office at 3610 N. 163rd Plaza, Suite 102.
“We’re targeting the addition of three to five investments (platforms) annually,” he said. “Our goal is to raise $200 million in 2022 for the continuation of our work.”
MGP, as a private equity fund manager, is responsible for more than $154 million in private capital across two funds. The business seeks to make succession planning liquidity or growth investments in established companies.
Fogle, an Iowa native with an undergraduate degree in finance from the University of Northern Iowa and an MBA from the University of Iowa, said the Omaha Superior Metal Products transaction maintains a consistent thrust from MGP that seeks businesses that are profitable, with an owner that is lacking an exit plan for significant growth and a product or service that offers a definable market position.
“What we’ve found is that most private equity funds avoid the rural marketplace — we prefer it,” Fogle said.
He notes past stops in his career that include time as managing director of capital markets at Farm Credit Services of America in Omaha, as well as a director and investment officer at Principal Global Investors in Des Moines.
Growth in Omaha
SMP, with a 30,000-square-foot plant and 50 employees between two shifts at 10708 S. 149th St. southwest of Omaha, specializes in medium-to-large production runs in 100-piece lot sizes and up. The firm founded in 1971 is ISO 9001
certified precision machining business currently serving agricultural, industrial and
construction industry clients with certified precision machining, including assembly, kitting, light fabrication and testing.
MGP Partner Mike Taylor said the Van Becelaere transaction demonstrates MGP’s commitment to grow the precision manufacturing platform both organically and via acquisition. The new combination represents more than 100 years of continual operation, and the capabilities and capacity afforded to each organization’s longstanding customer base.
President Vince Van Becelaere of Van Becelaere Machine Works said the Omaha transaction will facilitate his firm’s growth, while expanding its presence in the Midwest and significantly broadening its machining capability and capacity.
SMP President Randy Endorf said the combination ensures customer and employee needs will be met going forward. He will remain personally invested in the venture.
MGP, which in 2014 had seven portfolio company employees, today oversees ventures that total about 2,400 full and part-time workers.
An important factor, Fogle said, is that MGP has a licensed Rural Business Investment Company fund that targets investment opportunities in rural and underserved areas across the country. Investments range from $500,000 to $10 million.
“Ours is a unique approach for traditional private equity funds in that we can be more entrepreneurial in expanding our investment strategy,” Fogle said.
Broad categories include manufacturing, food/agricultural, as well as distribution and logistics. The food/ag category offers MGP its greatest growth opportunity.
“Iowa and Nebraska is the breadbasket of the world and provides our deepest network of people,” Fogle said. “Our focus is not on row crops and animals but rather the processing chain and investments in irrigation.”
Strengthening Rural Businesses
Investments to strengthen rural businesses range from California to South Carolina. Examples include Maytag Dairy Farms, in Newton, Iowa, which produces artisan blue cheese and an assortment of cheese spreads and related projects. A 2020 investment was made in Windom, Minnesota-based FAST Ag Solutions, a manufacturer of innovative liquid fertilizer applicators, sprayers, specialty trailers, and related agricultural equipment.
Fogel said impacts on work done by MGP can be seen throughout multiple communities including Lincoln and Omaha. An example is Stock’d Supply — a distributor of fasteners, gaskets and maintenance, repair and operations products serving OEM via vendor managed inventory programs. Technical Threads was merged into Bolts & Nuts in 2018. The company was rebranded as Stock’d Supply in 2020. That firm has a branch in Lincoln at 2139 Magnum Circle.
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