Andover Corporation Case Study

Andover Corporation Transaction

The Company

Founded in 1978, Andover Corporation (“Andover”) is a leading designer and manufacturer of high-quality, low to medium volume optical filters and coatings for military/defense, environmental, scientific and medical applications across the globe. Andover has a reputation in the industry for exceptional quality which is due to its vertical integration from design & engineering, to glass fabrication, polishing and coating through proprietary coating chambers to, final assembly and a comprehensive quality verification process. Andover’s products can be found on Boeing aircraft, the Joint Strike Fighter, Apache helicopters, gas sensing equipment, and satellites, to name just a few platforms.

We handed Peloton a big challenge, involving a variety personalities and interests, and somehow they made everyone happy. It is a testament to their professional skills and personal character.

John Cotton, President & Co-Founder (Retired) of Andover Corporation

The Challenge

After the co-founder and majority shareholder, Richard Bennett, passed away unexpectedly, the remaining shareholder and senior management recognized the importance of developing a succession plan that would ensure the longevity of Andover for its customers, vendors and its employees. It was important to find an advisory partner that understood the various stakeholders and potential diverging interests of (i) a majority owner estate controlled by an unrelated trustee that has a fiduciary duty to obtain the highest value, (ii) an existing shareholder and President looking to retire in the near future, (iii) an integrally important senior management team looking for a partner that can assist in accelerating the company’s growth trajectory and reach its full potential and (iv) a desire to simultaneously sell the real estate and facility owned in a separate, but affiliated, real estate holding company.

The Solution

Over a 6 month process, Peloton positioned the company and proactively sought out an Investor candidate that would appreciate Andover’s reputation, capabilities, culture, employees, and proprietary technology in thin-film optical coatings. With multiple strategic and financial investors to choose from, Andover ultimately decided to partner with MCM Capital Partners, a microcap private equity firm focused on acquiring niche manufacturers. Andover is a platform investment for MCM and the firm is focused on supporting the company’s long-standing management team, expanding the company’s reach and capabilities and growing the company organically and through opportunistic acquisitions. The President agreed to a 6 month transition period before his ultimate retirement, while still maintaining a Board seat and equity ownership in Andover. The senior management team was also provided the opportunity to invest in the equity of Andover allowing them to participate in its future growth. Finally, in connection with the closing, Peloton helped facilitate a sale-leaseback of the real estate to a publicly-traded REIT thereby maximizing the value for the sellers.

View the transaction announcement.