By Maureen Flanagan
Building on a family business started more than 50 years ago, Euro-Pro Corporation has become a highly successful designer, marketer and distributor of vacuum cleaners and household appliances. Its brand names -- Shark, Fantom, Bravetti, Omega and Euro-Pro - are well known to consumers and synonymous with quality, innovation and superior performance. The company's strong partnerships with leading retailers and strategic use of specialty marketing channels such as television and the Internet have resulted in rapid growth and wide product distribution.
In August 2003, Euro-Pro was recapitalized by management and Weston Presidio, a private equity group based in Boston and San Francisco. Weston Presidio has over $2.3 billion under management and a portfolio including several well-known consumer retail companies. In support of the transaction, American Capital Strategies, Ltd. (Nasdaq: ACAS) invested $50 million of senior financing.
"This represents a satisfying milestone for our family enterprise. Our business can now continue its expansion with new products, wider distribution and increased geographic coverage," said Mark Rosenzweig, Euro-Pro's Co-President. Mark and his brother, Stanley Rosenzweig, will continue to lead the business with its new partners.
Euro-Pro designs and manufactures over 50 different consumer appliances. The company's Shark product line of corded and cordless handheld vacuums are top sellers in the U.S. market, offering greater suction power and more innovative features than competing products. Euro-Pro's Bagless Stick Shark vacuum is also one of the most successful products in its category. The company's wide range of vacuums and cleaning products include a fast growing line of steam cleaners (using steam rather than chemicals to clean hardtop surfaces such as kitchen table tops, sinks, and bathtubs) and a new cordless sweeper that has reinvigorated that market segment.
In 2002, Euro-Pro acquired the Fantom brand name, a well-recognized brand that introduced the first bagless upright vacuum. Fantom provides the company with growth opportunities in this market segment, the largest in floor care products.
"Euro-Pro's strong and deeply committed founders and management team have built a company with leading brand recognition and market position in established and growing markets," said American Capital Principal Frank Do. "Its nimble product development and flexible outsourced Asian manufacturing enables the company to quickly anticipate and satisfy market demands by introducing new products and enhanced features. This, in conjunction with the company's effective multi-channel marketing strategy, remarkable product breadth and flexible, low cost operating structure, are all competitive advantages that form the basis for further growth."
In the August 2003 recapitalization, GMAC provided a revolving credit facility alongside ACAS' financing package. Mass Mutual Life Insurance Company and other institutional investors invested in senior subordinated debt and the company's senior management and Weston Presidio contributed the equity.
Euro-Pro joins American Capital's diversified portfolio of companies representing more than $1.8 billion of investments in more than 75 middle-market companies.
For more information about American Capital's portfolio click here.
