P&M Corporate Finance (“PMCF”) is pleased to announce that it served as the exclusive financial advisor to Zhongli Corporation (“Zhongli” or the “Company”) on its acquisition of Stern Rubber Company (“Stern”). PMCF also served as Zhongli’s advisor in securing credit facilities from First Merit Bank (“First Merit”) to finance the acquisition.
Zhongli Corporation is based in Shanghai, China and is a leading Tier I and Tier II supplier of rubber-to-metal bonded and plastic automotive assemblies and component parts to the global automotive OEM market. The Company’s primary product competencies include engine mounts, chassis assemblies and components, suspension parts and decorative plastic parts. Zhongli Corporation has operations in Asia, North America and Europe.
Founded in 1969 and headquartered in Staples, Minnesota, Stern is a leading nationwide provider of custom molded rubber products to the industrial plumbing, power sports and general manufacturing industries. Utilizing state-of-the-art equipment, Stern maintains a differentiated service offering, including injection molding, compression molding and transfer molding and is well-known in the industry for its ability to bond rubber with various other substrates, such as metals, plastics, cables, cords and other rubber pieces. Additional offerings include rubber extrusion and mold design and build services. It serves over 150 active customers, with several relationships spanning 30 years. Among other recognition, Stern has been awarded Supplier of the Year by its largest customer nine of the past ten years and has earned the Award of Excellence from another key customer each of the last three years.
“Our investment in Stern serves as recognition for the reputation they have built over the last forty five years as a supplier of custom molded rubber products,” said Mr. Johnny Dai, President and Shareholder of Zhongli. “That reputation coupled with an impressive management team, experienced employee base, strong relationships with core customers and state-of-the-art equipment base supplement our strengths nicely. We believe that the combination will bring benefits to our customers and end users as well as our employees that would not be possible while operating independently.”
PMCF was hired by Zhongli to serve as its exclusive investment banker to lead an acquisition campaign aimed at expanding its North American manufacturing presence and solidifying its position as a pre-eminent supplier to North American OEMs. Ken Rohan, Vice President of Operations at Zhongli North America, said “Pursuing an acquisition to expand our manufacturing capabilities, diversify our business, and grow our geographic footprint in the United States is a key strategic priority for Zhongli. We are committed to our customers’ success and we believe that having a significant domestic manufacturing presence allows us to do that while still remaining competitive in today’s market.”
Mr. Rohan added, “We have worked closely with Plante Moran on accounting related matters for many years and knew that the firm also had an affiliated investment banking group. When we decided to aggressively pursue an acquisition to accomplish our strategic objectives, we spoke to PMCF and selected them to advise us throughout the process. We were impressed by their acquisition advisory experience and track record working with automotive suppliers. Their knowledge of our business and industry allowed them to identify a number of compelling target opportunities, including Stern. They also shepherded us through the financing process effectively and we are pleased to partner with First Merit to achieve our growth plans.” Joe Wagner, Director at PMCF, added, “Assisting the Company to achieve the first step in its strategic growth plan is rewarding. We are looking forward to watching Zhongli become an increasingly larger presence in the U.S.”
Kerr, Russell and Weber, PLC served as legal counsel to Zhongli. The transaction closed in October 2015.