H.I.G. Capital, a Miami-based private equity firm, announced today that it has acquired DESA International, Inc. ('DESA').
December 26, 2002 – H.I.G. Capital, a Miami-based private equity firm, announced today that it has acquired DESA International, Inc. (“DESA”). Headquartered in Bowling Green, Kentucky, DESA manufactures and markets high-quality, branded zone heating products, hearth products, security lighting and specialty tools for use in homes and commercial buildings. Its products carry the Vanguard, Comfort Glow, Reddy Heaters, Remington, Master and Heath/Zenith brand names. DESA sells its products through multiple consumer and commercial channels of distribution including home centers, mass merchants, hardware cooperatives, specialty heating distributors and construction equipment dealers.
With facilities in Kentucky, Tennessee, California, China, Holland, Italy and Mexico, DESA is among the world’s largest manufacturers of these products. The company is the market leader in most of its product lines and is a major supplier to the top home improvement retailers in North America. In 2002, DESA generated nearly $400 million in revenue from more than 500 customers worldwide.
H.I.G. Capital acquired substantially all of DESA’s assets from its parent company, which had recently filed for bankruptcy. With this acquisition, the new company starts as a strong business with industry leading design and manufacturing capabilities, an excellent customer base, and a clean balance sheet.
“This outcome is ideal,” said W. Michael Clevy, DESA’s President and Chief Executive Officer. “Thanks to the tremendous expertise and dedication of our employees, we were able to preserve a solid company and more than 1,000 jobs, not to mention our service to customers who critically depend on us. I am also very excited about H.I.G. Capital as DESA’s new owner. The new DESA will have a clean balance sheet and will be well-positioned, financially, operationally and competitively, to make a fresh start. I look forward to the beginning of an exciting new era, marked by increased sales, profitability and growth.”
Charles Hanemann, Managing Director of H.I.G. Capital, said, “We are very pleased to add DESA International to our portfolio of strong, entrepreneurial, growth-driven companies. Under the leadership of Mike Clevy and his management team, DESA has retained its value through a challenging time and the new DESA will be able to effectively service its customers through the normal distribution channels with support from existing vendors. We share management’s excitement about the future and look forward to working with them to build a new DESA for its customers, business partners and employees alike.”
H.I.G. Capital is a leading private equity and venture capital investment firm with more than $1 billion of equity capital under management. Based in Miami, and with offices in Atlanta, Boston, and San Francisco, H.I.G. specializes in providing capital to mid-market companies with attractive growth potential. H.I.G. invests in management-led buyouts or recapitalizations of well established, profitable, and well managed manufacturing or service businesses. H.I.G. generally focuses on middle market transactions where it is able use the operating expertise of its principals to improve the performance of its portfolio companies. Since its founding, H.I.G. Capital has made more than forty highly successful investments, acquiring companies with combined revenues in excess of $4.0 billion. H.I.G. Capital is the former owner of the Heath/Zenith Company, the leading supplier of wireless door chimes and security lighting products to the home improvement market, which it sold to DESA in 1998.
Abelco Finance, LLC (an affiliate of Cerberus Capital Management, LP) provided one-stop financing for the transaction.