Dynojet Research, Inc., Las Vegas, has acquired Dynatek, a company operating as Dyna Performance Electronics. Terms of the transaction were not disclosed.
Based in Glendora, Calif., Dynatek is a designer, assembler and manufacturer of performance electronics for motorcycles, ATVs, dirt bikes and drag bikes; as well as electronic accessory products, including coils, spark plug wires, voltage monitors, charge monitors, relay kits, toggle switches and pressure switches.
“We have experienced tremendous sales growth in 2004 and expect the Dyna acquisition will allow us to amplify this trend,” said Robert Vlcek, president and CEO of Las Vegas-based Dynojet. “With the support of Graham Partners, we continue to look for add-on acquisition opportunities to expand our product offering and solidify our position as a leading supplier of aftermarket performance products for motorcycles and powersports equipment.”
The Dynatek acquisition was financed entirely by Dynojet’s existing debt financing sources, including Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services Inc., and Sovereign Bank, which provided additional senior debt, and Norwest Mezzanine Partners I, LP, which provided additional mezzanine debt. Industrial private equity firm Graham Partners, Philadelphia, acquired Dynojet from The Riverside Company in February 2004.
Dynojet is a leading manufacturer of performance diagnostic equipment for engines (approximately 42% of total sales); and, with its branded Power Commander, Jet Kit, and Dynamometer product lines, is a leading manufacturer of aftermarket engine performance products for motorcycles, powersports vehicles, and cars (approximately 58% of sales). The company sells its products in 32 countries around the world. While based in Las Vegas, it has other facilities in Belgrade, Mont., as well as Holland, Germany and England.
Dynojet’s Dynamometers are used by race teams Yoshimura Suzuki, Team Kawasaki, Team Yamaha, Erion Racing, Team Valvoline/Emgo Suzuki, Graves Yamaha, American Honda Racing and Ducati SBK, among others; aftermarket exhaust manufacturers Akrapovic, Arrow, M4 Exhaust, Hindle, Yoshimura, Vance and Hines, FMF, Two Brothers Racing and Muzzy’s; and by MMI in student training.
Since Graham Partners acquired Dynojet, the company has experienced growth enabling Graham Partners to cash out 48% of the original equity investment as part of a recapitalization transaction. Dynojet’s growth has largely been fueled by the ongoing conversion to fuel-injected motorcycle and ATV engines, which have traditionally been carbureted, said Vlcek.
“We are pleased to be able to return roughly half of our investors’ capital from Dynojet in such a short time span after our initial investment,” said Rob Newbold, managing principal of Graham Partners. “Dynojet has been a testament to Graham Partners’ strategy of acquiring companies with leading positions in high growth niches that are the beneficiaries of conversion trends in their respective industries.”
Graham Partners is a lower middle market industrial private equity firm based in suburban Philadelphia managing a private equity fund with $227 million in committed capital. It is an investment affiliate of the privately held Graham Group of York, Pa., an industrial and investment concern with global interests in plastics, packaging, machinery, building products and outsource manufacturing. Since the firm’s founding in 1988, Graham Partners has closed over $3 billion in acquisitions, joint ventures, financings and divestitures, and has had first-hand involvement in the operations of companies in numerous different manufacturing sectors. The company says it seeks to acquire industrial companies with revenues between $20 million and $250 million that participate in manufacturing niches in which it can leverage its unique combination of operating resources and financial expertise.
Copyright 2004 Powersports Business