MidOcean Partners has acquired Cloyes Gears and Products from Hidden Harbor Capital Partners.
MidOcean is a New York City-based “middle-market private-equity firm focused on the business services and consumer sectors,” according to the firm’s website.
Financial terms of the transaction were not disclosed.
Hidden Harbor, which describes itself as “an operationally oriented investment firm focused on the industrials and business services sectors,” acquired Cloyes in 2018 as a carve-out from American Axle & Manufacturing. In partnership with the Cloyes team, Hidden Harbor said it “made substantial investments to build a highly scalable, standalone organization and develop a best-in-class platform within the automotive aftermarket industry.”
“Over Hidden Harbor’s ownership period, Cloyes grew VIO coverage, captured considerable sourcing savings and drove significant organic growth through new-product introductions and new-customer wins,” Hidden Harbor said in a news release.
Cloyes is a Fort Smith, Arkansas-based designer, developer, manufacturer and distributor of timing-drive systems and engine components for original-equipment manufacturers and the automotive aftermarket, selling its products under the Cloyes brand throughout North America and Dynagearin Mexico.
MidOcean Partners said it plans to continue the company’s aggressive growth plan through comprehensive organic initiatives and strategic M&A.
This transaction represents MidOcean’s third recent investment in the automotive aftermarket, after completing investments in FullSpeed Automotive in November 2020 and Holley Inc. through its merger in July 2021 with Empower Ltd., a publicly traded special-purpose acquisition company formed by MidOcean Partners.
Cloyes was founded in 1921 and has built a reputation among engine builders and technicians of quality and best-in-class VIO coverage, providing its more than 300 customers with access to more than 2,700 SKUs. The company’s products are mission-critical components for engine performance and function used in high-performance and replacement applications.
Cloyes serves a broad customer base, including wholesale distributors, national and local retailers, re-packagers and production-engine builders.
“We couldn’t be more excited to partner with CEO John Hanighen and the Cloyes team, who are proven leaders in the automotive aftermarket space,” said Steven Loeffler, principal at MidOcean. “The team at Cloyes has done an amazing job building its VIO coverage, continuing to develop new products and winning new customers. We believe there are numerous opportunities through both organic initiatives and accretive strategic acquisitions to continue this growth.”
Marc Graham, MidOcean’s operating partner, added: “The Cloyes brand has been synonymous with excellence in timing systems for over 100 years, and we are thrilled to continue that leadership going forward. Cloyes has a best-in-class product suite, complemented by world-class product development capabilities. On a personal note, I have known John for over 35 years and am excited to work with John and his tremendous team.”
Gibson Dunn & Crutcher LLP acted as legal advisor to MidOcean. Stifel, Nicolaus & Company Inc. served as lead financial advisor with Donnelly Penman & Partners as co-advisor and McDermott Will & Emery LLP as legal advisor to Cloyes.
“We are excited to partner with MidOcean to accelerate growth and innovation for the Cloyes platform,” said John Hanighen, CEO of Cloyes. “MidOcean has an impressive track record in executing transformational growth, and they bring deep expertise in the auto aftermarket that will enhance our ability to better serve our customers, our employees, our vendors, and our partners, while also providing support for the company to expand into additional markets and product lines.”