Sage Automotive Case Study

Sage Automotive Case Study 2017-12-12T19:16:01+00:00
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Company

Sage Automotive Interiors, Inc. (“Sage”) is a leading designer and manufacturer of automotive body cloth (seating fabric, door panels, and headliners). The Company serves major Original Equipment Manufacturers such as GM, Toyota, Ford, Honda, Chrysler, Nissan, and Hyundai/Kia. Sage has a global presence with five manufacturing plants in North America (SC & GA), one in Brazil, and additional contract manufacturing arrangements in Europe, Japan, and China.

Opportunity

In September 2009, Azalea partnered with a proven management team acquire Milliken & Co.’s Automotive Body Cloth Division.  The company was rebranded as Sage Automotive post-close. At the time of the investment, the global automotive industry was experiencing significant challenges.  However, Azalea and management firmly believed that with appropriate restricting, Sage could prosper as a stand-alone business as the market recovered.  Sage’s world class technology and manufacturing assets as well as its customer-centric mindset were positioned to capitalize on an upturn in automotive vehicle sales.

Value Creation

  • Right-size the business to enhance operating efficiencies based on market demand
  • Establish an independent, world-wide ERP system
  • Create a capital structure to provide management flexibility needed for rapid growth
  • Retain and expand upon Milliken’s continuous improvement processes and environmental sustainability initiatives
  • Align key management team members through current and long-term incentive plans, including equity ownership

Result

  • Over 750 jobs saved and 250+ new jobs created during Azalea’s investment
  • Revenue grew by over 50%
  • Operating profits increased 3.5x
  • Successful exit of the investment via a competitive sale process yielding significant equity value for all shareholders
  • Southern Capital Conference Deal of the Year Award (2011)