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So
far, 1998 has been all about growth. Our portfolio companies,
our staffing, Tad's family -- all grew in significant ways.
Tad & Wendy had a new baby girl named Julia in August . We
hired Grant Clayton as an associate in June. Previously he
worked with McKinsey & Co. in Atlanta and with First Boston
in Los Angeles. He received his MBA from Harvard Business
School.
In March, Trussway acquired a $10 million multi-family truss
and wall panel manufacturer. In May, we hired Warburg Dillon
Read to help us realize our investment in Trussway. We and
management believe that the race to consolidate the factory
built housing component industry has begun and that a new
partner with deeper pockets and experience with consolidating
industries would better serve Trussway's needs. As the Warburg
Dillon Read process continued through the summer, we signed
an agreement to acquire a $40 million single family truss
manufacturer which provides the company with its single family
growth platform. All through this period Trussway has generated
record profitability. We are now in negotiations with a new
partner for Trussway and look forward to an October closing.
SCOA closed its acquisition of a $30 million competitor in
March. SCOA also hired a new Chief Operating Officer to focus
on store operations leaving Denny Tishkoff, the CEO, to focus
on growth opportunities. The company continues to put up strong
comp store gains although the daily ups and downs of the retail
business are contributing to some new gray hairs in the office.
Spyder has been busy building its internal resources to help
meet its growth objectives. They have reorganized the structure
of their European distribution, hired a manager to oversee
the European operation, hired a VP of Global Sales and Marketing
to drive their marketing efforts and hired a manager to oversee
their Asian production. We are very excited by the pace of
activity at Spyder and the energy that the new people have
brought to the company's efforts.
Champion Technologies has been affected by the overall slowdown
in the electronics industry. Demand from its core cellular
and internet customers has continued to be strong as orders
from its other customers have fallen off. We look forward
to an end to the Asian flu.
We began the process of raising capital for CHB Capital Partners
II in the spring and plan to have our first closing shortly.
We encourage you to call us with interesting investment opportunities
within the closely-held and family owned business market.
We look for transactions where we can invest equity capital
in established companies with $20 million or more in revenue.
Should you call, we guarantee you a thoughtful and timely
response.
Best regards,
Tad Kelly, John Flanigan, Blake Morris & Grant Clayton
511
Sixteenth Street, Suite 600 Denver, CO 80202
Telephone: (303) 571-0100 Facsimile: (303) 571-0114
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