New PEGCC Video Chronicles the Transformation of AxleTech from a Regional Manufacturer to a Global Industry Leader
Judge: “AxleTech is a great example of private equity changing the trajectory of a business to create lasting success long beyond the sale of the firm.”
Washington, D.C., May 23, 2012 – With the presidential election in full swing and renewed interest in the private equity business model, the Private Equity Growth Capital Council today released a new video chronicling how private equity investment transformed Michigan-based AxleTech International from a regional manufacturer into the world’s leading supplier of specialty axles to the U.S. military. AxleTech was private equity-owned from 2005 to 2008, when it was sold to General Dynamics. This is the latest video case study in the Private Equity Growth Capital Council’s “Private Equity at Work” series.
“This video highlights private equity’s contribution to the AxleTech growth story. Strengthening companies and providing strategic expertise is the cornerstone of the private equity business, and AxleTech is a great example of private equity changing the trajectory of a business to create lasting success long beyond the sale of the firm,” said Steve Judge, president and CEO of the Private Equity Growth Capital Council. “Private equity’s business leadership mixed with AxleTech’s deep product and manufacturing knowledge created an opportunity to grow the business, hire more workers, and ultimately create more value for AxleTech. We’re extremely proud to add this video to our collection of private equity success stories.”
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. AxleTech continues operations as an industry leader today.
“I’m very passionate about private equity,” says former AxleTech Chairwoman and CEO Mary Petrovich in the video, “because it’s not only made a difference in my life; it’s made a difference in a thousand other employees of AxleTech’s life.”
Working with Carlyle during its ownership, Petrovich led AxleTech’s foray into the fast-growing military sector, targeting its heavy-duty axle and suspension systems toward military vehicle manufacturers building heavy armored vehicles for American soldiers in Iraq and Afghanistan.
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.
