MiddleGround Capital’s Strategic Move: Sale of Arrow Tru-Line

MiddleGround Capital’s Strategic Decision

MiddleGround Capital has made waves in the industry following its recent announcement regarding the sale of Arrow Tru-Line, an established player in the overhead garage door hardware market. This decision aligns with MiddleGround's focus on optimizing its portfolio and generating value through targeted exits.

Overview of Arrow Tru-Line

Arrow Tru-Line stands out as a prominent manufacturer and supplier of essential overhead garage door hardware components. Founded in 1970 and based in Archbold, Ohio, this company has earned its reputation by providing high-quality products to original equipment manufacturers (OEMs), distributors, and installers throughout North America. Their comprehensive range includes critical hardware such as hinges, brackets, springs, and pre-assembled track sets, showcasing their expertise in manufacturing.

The Rationale Behind the Sale

Since acquiring Arrow Tru-Line in late 2021, MiddleGround Capital has emphasized operational improvements that have significantly increased the company’s free cash flow and profitability. John Stewart, MiddleGround’s Founding Partner, shared his appreciation for the team’s efforts in positioning Arrow Tru-Line for future success, particularly during challenging economic conditions.

Future Growth Prospects

The sale to the Chamberlain Group, a renowned global leader in intelligent access and monitoring, is expected to enhance Arrow Tru-Line's reach and capabilities. Lindsay Quintero, Vice President at MiddleGround, highlighted Arrow Tru-Line's preparedness to capitalize on upcoming growth opportunities in the U.S. housing market, driven by aging housing stock and rising homeowner equity. This strategic alignment suggests promising growth scenarios for Arrow Tru-Line under Chamberlain's umbrella.

Investing in Strong Partnerships

Quintero expressed pride in MiddleGround's role in fostering Arrow Tru-Line’s growth through crucial investment in its manufacturing capabilities. This partnership has equipped the company to meet the high demand for residential repair and new construction, contributing to a robust portfolio poised for expansion.

Conclusion of MiddleGround’s Investment Cycle

This transaction marks the third full exit for MiddleGround’s first fund, which underscores the firm’s commitment to generating value for its investors. The successful sale of Arrow Tru-Line exemplifies MiddleGround’s adept management and foresight in navigating market conditions effectively.

Advisors on the Deal

Raymond James acted as the financial advisor to MiddleGround Capital, while Greenberg Traurig served as legal counsel. On the other side, Wells Fargo provided exclusive financial advisory services and Simpson Thacher & Bartlett LLP played the role of legal counsel for the Chamberlain Group.

About MiddleGround Capital

MiddleGround Capital is a private equity firm located in Lexington, Kentucky, managing over $4.1 billion in assets. The firm is distinguished by its operationally focused approach, making control equity investments within industrial and specialty distribution sectors. Collaborating closely with portfolio companies, MiddleGround emphasizes hands-on management strategies that promote sustainable growth.

About Arrow Tru-Line

As a pivotal player in the overhead garage door industry, Arrow Tru-Line specializes in producing and supplying critical hardware components. With multiple facilities in the U.S. and Canada, the company effectively supports both the residential and commercial sectors, ensuring high-quality products for its customers.

About Chamberlain Group

Chamberlain Group is a leader in intelligent access solutions and is part of the Blackstone portfolio. Their innovative products, including the myQ ecosystem, provide seamless access and monitoring solutions for homes and businesses worldwide. Chamberlain's reputation for quality positioning makes this acquisition beneficial for Arrow Tru-Line's future.

Frequently Asked Questions

What was the purpose of the sale of Arrow Tru-Line?

The sale aimed to enhance Arrow Tru-Line's market reach and operational capabilities under the Chamberlain Group, ensuring future growth.

Who advised MiddleGround Capital on this transaction?

Raymond James served as the financial advisor, while Greenberg Traurig handled legal matters for MiddleGround Capital.

How has Arrow Tru-Line impacted the garage door hardware market?

Arrow Tru-Line has set industry standards by providing high-quality components essential for garage door mechanics, appealing to OEMs and contractors.

What advantages does the Chamberlain Group bring to Arrow Tru-Line?

Being part of the Chamberlain Group allows Arrow Tru-Line to leverage advanced technology and expansive distribution networks in the intelligent access solutions market.

What is MiddleGround Capital's investment strategy?

MiddleGround Capital focuses on operational improvements and active management within its portfolio to drive value and income growth for investors.

About The Author

Hello, I'm 30-year-old financial writer and expert Addison Perry, and I love to simplify the intricacies of the financial industry. I've committed myself over the years to deciphering the subtleties of investing techniques and economic trends and converting them into doable guidance that anybody can use. My goal with writings and books is to make money interesting and approachable so that readers may take charge of their financial futures.

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