Completing Transformative Acquisitions
Nekoosa is a leading manufacturer of specialty film and paper products used in the graphics and commercial print markets. Nekoosa produces a comprehensive suite of specialty engineered materials in four key product areas: application and pressure-sensitive tapes used to protect and transfer graphics onto surfaces such as store windows and commercial vehicles; specialty synthetic papers that offer a digitally printable tear-and-water-proof alternative to lamination; sheeted digital and offset grade carbonless paper; and extruded film products used in wall panels, credit cards, and lighting applications. Through a network of more than 1,000 global distributor partners, Nekoosa serves a diverse base of more than 70,000 commercial print and graphics shops in 65 countries.
Background
Nekoosa’s solid performance in the first two years under Sentinel ownership was disrupted in March 2020 by the Covid-19 pandemic. With Nekoosa’s core markets coming to a standstill, management pivoted to control costs, preserve cash, and focus on specific products needed for the pandemic. Nekoosa’s swift execution positioned the company to play offense at a time when others were reeling.
In late 2020, Nekoosa was presented with an opportunity to buy a struggling competitor’s carbonless paper division, whose products held the #1 market share. This competitor’s products were produced in a suboptimal plant that needed to be closed. Nekoosa’s platform was perfectly suited to manufacture the competitor’s suite of products.
Opportunity
To support Nekoosa’s acquisition of the leading brand in carbonless sheets, further consolidate the market, and establish Nekoosa as the global market leader
Accomplishments
- Fully Integrated Manufacturing: Over six months, Nekoosa successfully added 125,000 square feet of new production capacity to manufacture the acquired brands without any production or delivery issues for customers.
- Augmented and Strengthened Management Team: Nekoosa strengthened its management team by retaining several key executives from the acquired company, which subsequently enabled Nekoosa to significantly boost revenue growth through cross-selling.
- Positioned for Post-Covid Rebound: Having smoothly combined the two businesses, Nekoosa was primed to thrive as customers reopened from the pandemic and product demand was restored. Under Nekoosa’s ownership, the acquired business’s EBITDA more than doubled in the next 18 months.
Outcome
During our ownership, we helped management navigate the pandemic and complete a transformative acquisition to become the clear industry leader. In 2022, after having held the business for five years and having achieved our investment objectives, Sentinel sold Nekoosa to a strategic buyer who elevated Nekoosa’s senior management to run their entire business platform.
Case studies have been selected for illustrative purposes for management teams of midmarket companies considering a partnership with Sentinel and should not be considered an offer or solicitation of services or an actual or implied endorsement of Sentinel or any security, investment, or portfolio company. The portfolio companies highlighted are not representative of all current and prior investments of Sentinel. A list and description of investments since Sentinel’s inception is available on this website.