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Acquisition Won’t Change Central Moloney, Hart Says

3 min read

Central Moloney Inc. CEO Chris Hart foresees just one change in his job since a private equity partnership acquired the Pine Bluff electric transformer manufacturer.

“I’m still president and CEO of this company, and I hope that the only change that happens is that I pretty quickly become president and CEO of a much larger Central Moloney,” Hart said.

Wind Point Partners confirmed its acquisition of the nine-figure manufacturing company on Oct. 27.

No financial details were revealed, but Hart spoke about other details, saying a deal was necessary to unwind CMI’s employee stock ownership plan. The ESOP was hindering CMI’s growth in what Hart calls the hottest transformer market ever.

Central Moloney has 500 employees in Pine Bluff and now has a full manufacturing shift working at a new plant in Bay County, Florida. It expects to start construction soon on another plant in nearby Okaloosa County.

CMI’s success over the past few years created a repurchase obligation to the mature ESOP, established in 1998, and a need for cash to recirculate shares.

“Quite frankly,” Hart said, “that was going to stand in the way of our ability to use capital to grow.”

Hart sought counsel and heard that the best scenario was to find a partner to unwind the ESOP. “It didn’t take that much looking, and before I knew it, we had multiple offers for an acquisition,” he said. “We picked Wind Point because it is not your typical private equity firm in regards to looking to cut costs. Wind Point is in it for the long haul, and their mission is to grow.”

Wind Point describes itself as a private equity investment firm that partners with “top-caliber executives” to acquire middle-market businesses with clear growth potential. “Since our founding in 1984, we have raised over $5 billion in commitments and acquired more than 100 platform companies and 300 add-on acquisitions,” the firm’s website says.

“They have a sizable fund and a track record of taking good companies and making them great,” Hart said. “And that’s exactly what the plans are for Central Moloney.”

Hart expects a two-pronged approach. “We’re going to continue to grow organically, because Wind Point absolutely believes in the methodology that we’ve taken so far. But I think they’ll probably also look for some acquisition opportunity somewhere down the road. These guys have made a lot of money using the Wind Point method of growing businesses and they want to bake that into the electrical market … .”

Wind Point’s acquisitions through the years include Pacific Cycle, parent company of Schwinn, optic products maker Bushnell Corp. and Gehl Foods.

Hart said his company sells its transformers as quickly as it makes them. “I just hate the notion of having market share that’s out there and available” at a time when Central Moloney can’t meet it. With Wind Point’s investment, he expects CMI “will not only get more [market share], but get a lot more.”

The acquisition will help the Pine Bluff workforce, he said. “We build the world’s best transformers right here in southeast Arkansas, day in and day out.

“There’s no change for employees,” Hart said, adding that Wind Point invests in both companies and people. “They knew that that was part of the deal.”

Wind Point is now the sole owner of Central Moloney, but it uses a different term: partnership instead of ownership, Hart said. “I’ve never had a lot of instruction on how to be a CEO. Obviously I’ve spent five years doing this. But one of the things that excited me about Wind Point is their idea to surround me with seasoned people … to nurture me and get me to become a much better version of who I am now.”

Hart emphasized that CMI won’t leave Pine Bluff: “We’re not going anywhere.”

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