In December 1997, Advent led a majority recapitalization of Contact East, a direct-marketing distributor of electronic tools and production supplies, including test equipment, soldering and rework stations and hand tools. The company sold its products to electronics assembly and production companies across North America through a nationally distributed catalog, Web site and direct sales force.
Contact East's management team, led by CEO and founder Kai Juel, recognized the opportunity to consolidate the company's fragmented, $2 billion distribution category. They sought a knowledgeable financial partner who could lead a recapitalization of the business to provide partial liquidity to shareholders and funding for acquisitions.
From an investment standpoint, Contact East was a textbook platform company. It had strong gross and operating margins, a newly implemented order-taking and inventory management system, a diversified customer and vendor base, and a consistent record of profitability.
Post investment, Advent helped the company fill out its senior management team and provided significant acquisition and strategic support. From 1998 to 2000, Contact East completed four acquisitions and increased revenue and EBITDA by 104% and 100%, respectively. In April 2001, in partnership with management, we led the successful sale of the company to The Stanley Works (NYSE: SWK).