AxleTech® International: Growing a Successful Company
AxleTech International is a manufacturer based in Troy, Michigan, that grew to become the world’s leading supplier of specialty axles to the U.S. military with the help of private equity investment. With an injection of capital and management expertise from The Carlyle Group, AxleTech doubled employment from 500 to nearly 1,000 employees and increased aftermarket revenue by 300 percent between 2005 and 2008.
Investment Highlights:
- Tripled AxleTech’s level of capital spending on new machinery and facility expansion, resulting in a doubling of worldwide production.
- Doubled employment from 500 to nearly 1,000 between 2005 and 2008.
- Shifted the company’s strategy to focus on the fast-growing military sector, becoming the #1 supplier of planetary axles to the U.S. military.
- Expanded product offerings in the commercial aftermarket, generating a 30% increase in annual aftermarket revenue and a more than 180% increase in EBITDA from 2005 through 2008.
- Enhanced senior management by partnering with CEO Mary Petrovich to upgrade key positions and by providing an equity incentive plan for executives.
Solid Experience and Farsighted Vision Lead to Global Growth
Based on its successful ownership of other companies involved in the transportation sector and the manufacturing of highly complex mechanical parts, The Carlyle Group recognized AxleTech’s significant growth potential, and acquired the company in October 2005.
Working with Carlyle, Axle Tech’s management team successfully expanded the company’s focus on the military market and the commercial aftermarket, while significantly increasing capital investment and successfully executing three add-on acquisitions. This resulted in a doubling of worldwide production capacity from 2,300 to 4,600 axles per month.
With Carlyle’s strategic assistance, AxleTech focused its development efforts on the fast growing military sector. The company targeted its heavy-duty axle and suspension systems to military vehicle manufacturers building heavy-armored vehicles for American soldiers in Iraq and Afghanistan. As a result, the company implemented 49 development programs for new products.
With Carlyle’s strategic assistance, AxleTech focused its development efforts on the fast growing military sector. The company targeted its heavy-duty axle and suspension systems to military vehicle manufacturers building heavy-armored vehicles for American soldiers in Iraq and Afghanistan. As a result, the company implemented 49 development programs for new products.
Investments Yield Superior Returns and Fuel Job Creation
While pursuing these growth opportunities in the defense sector, the company expanded its product and service offerings in the replacement parts business and continued to expand its
In the three years since its acquisition by Carlyle, AxleTech tripled its level of capital spending in new machinery and facility expansion, resulting in a doubling of worldwide production. The company’s expanded product offerings in the commercial aftermarket generated a 30 percent increase in annual aftermarket revenue and a more than 180 percent increase in EBITDA from 2005 through 2008. Further, Axle Tech doubled employment from 450 to nearly 900, including 300 unionized employees affiliated with the United Auto Workers.
In addition, Carlyle worked with AxleTech to strengthen the company’s management team, enhance the company’s financial reporting capabilities, and implement an equity incentive plan to better align the interests of owners and employees.
Outlook: Continued Growth Expected
Carlyle exited its investment in AxleTech through a sale to General Dynamics in December 2008. At the time of the sale, AxleTech had become the #1 supplier of planetary axles to the U.S. military and a key supplier to a growing global market.
