Kilmer was introduced to SMTC by the management of another
portfolio company.
Through a previous investment in the electronics industry, Kilmer had
become aware of a trend among electronics OEMs to begin outsourcing the
manufacturing of their products. The EMS industry was exhibiting
compound annual growth rates of 20% from a base of $9 billion in 1994 and
was forecast to continue to grow. The EMS industry was highly fragmented
and conducive to accelerated growth through acquisition.
In the year preceding Kilmer’s investment, SMTC generated revenues of
$18 million from a single plant in Toronto, Ontario. The management of the
company were experienced, multi-disciplined Motorola trained owner/operators
that had grown the company profitably from inception 10 years earlier.
SMTC had a well defined plan to grow through acquisition but lacked both the capital and acquisition expertise to execute
such a plan. Working closely with management, Kilmer developed and executed a consolidation strategy that saw the company
complete nine acquisitions with an aggregate value in excess of $200 million in less than five years. During this period of
rapid growth, Kilmer reviewed over 50 acquisition candidates on behalf of SMTC and was involved in all phases of each
acquisition, including the sourcing, evaluation, negotiation and financing. |
