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By Maureen Flanagan
Sanlo Manufacturing Co., Inc., based in Michigan City, Indiana, is a leading manufacturer and distributor of coated cable, cable assembly products and accessories. Owned by the Sandin family since its founding in 1957, Sanlo specializes in custom-built products, providing smaller volume, short-run and cut-to-length cable and assemblies to a diverse base of over 3,000 customers. The company's broad product line, quick-turn delivery, and focus on customer service have made it a consistent top performer in its market.
In July 2004, Sanlo was acquired by Cortec Group, a New York-based private equity investment firm. American Capital Strategies, Ltd. (Nasdaq: ACAS) provided $11 million of subordinated debt financing in support of the buyout. Merrill Lynch Capital provided senior financing.
"Sanlo's solid foundation is based on high-quality products and exceptionally strong customer service and relationships," said Dennis Wolf, the company's President. "We plan to carry these strengths into new areas through geographic expansion and an increase in our customer base."
Sanlo originally focused on coating cable with vinyl and nylon to increase a cable's life span. In 1962, the company expanded into the cable distribution business with bare galvanized and stainless steel cable. After fabricating cable assemblies for the boat manufacturing industry in the late 1960s, Sanlo began supplying assemblies and cut-length cable for applications such as gas pumps, bike locks, and telephone booths.
Today, the company's cable products are used in a wide range of industries that include general manufacturing, automotive, security, recreational vehicles, railroad and medical products. Sanlo's products are made of strand, wire rope and cable sold in a variety of strand constructions, metal types, coatings, and diameters.
"Sanlo fills a niche that is unserved by larger fabricators," said Brian Graff, American Capital Principal. "As such, Sanlo's customers rely on Sanlo for their cable products and have demonstrated their loyalty and satisfaction through high approval ratings and long-term relationships." To complete the July 2004 buyout, Merrill Lynch Capital provided a revolving credit facility and senior term loans alongside American Capital's subordinated debt investment. Cortec Group invested in the company's common stock.
Since 1997 American Capital has invested more than $3.3 billion in middle-market companies. Its portfolio currently includes more than 100 companies in a wide range of industries.
For more information about American Capital's portfolio click here. Sanlo holds a leading position in the low-volume cable products market, a $95 million subset of the overall $1.8 billion domestic wire rope, cable and strand market. The market is highly fragmented with only a handful of companies with significant market share. Going forward, Sanlo anticipates increasing its share by capturing more business from the market not served by the principal players - a significant segment that represents almost a quarter of the market. Sanlo already has a significant position in the North Central region of the United States, where it is headquartered, and is targeting acquisition opportunities to expand the company's geographic footprint.
With a focus on product quality, reliability and efficient service - often cited by customers as the most important criteria in choosing a supplier -- the company is well positioned to build its customer base. Sanlo's brand recognition is strong and generates a significant referral business. Continuing to build on its competitive strengths, Sanlo has a wide range of opportunities to expand operations and increase market share.
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