Corporate Carveouts

Fasloc was owned by DuPont, who developed Fasloc’s products to complement its mine explosives business. DuPont handled the sale internally and had no advisor represent them in the sale.
Two challenges faced DuPont as a seller. First, Fasloc was not a standalone business: it was a manufacturing plant with key support functions (including finance, IT, and human resources) handled by DuPont. Second, Fasloc’s senior management were long-time DuPont employees who were initially disappointed about the divestiture of their business and the possibility of losing DuPont’s “gold-plated” healthcare and retirement benefits, for which they had worked many years to be eligible. To address these challenges, (i) one of Sentinel’s executives functioned as interim CFO and worked closely with management to oversee installation of the systems necessary to establish the business as a standalone entity; and (ii) we provided Fasloc’s employees with comprehensive health and retirement benefits similar to those provided by DuPont.
DuPont selected Sentinel based on (i) our undertaking to provide Fasloc’s employees with comprehensive DuPont-like benefits; (ii) Sentinel’s commitment to a fast-track closing within 45 days of signing a letter of intent; and (iii) our willingness to take on the challenges of making Fasloc a standalone business.

• To acquire the leading industry brand and established leader in a growing niche market fueled by a favorable growth outlook for the coal industry
• To invest in a platform business with a long history of profitability, a high return on net invested capital, and attractive free cash flow
• To partner with Fasloc’s committed and highly experienced management team

Smooth Transition to a Fully Standalone Business: Within 90 days, working closely with management, we implemented a new IT system, significantly professionalized the accounting function, put in place significant equity and pay-for-performance incentives to promote an entrepreneurial culture, and hired a new CFO.

Jump-Started Sales and Profit Growth: Within 15 months of the closing, sales grew by approximately 25% and profitability increased by 60%.

DYWIDAG-Systems International, a leading European mining and tunneling systems manufacturer, made an unsolicited approach to buy the business. DYWIDAG had important strategic reasons for wanting to own Fasloc and was willing to pay a preemptive price. In consultation with management, Sentinel agreed to a sale, which produced a significant gain for all investors.