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DENVER — CHB Capital Partners has sold HiRel Systems, LLC for $85 million, marking the sixth exit for the firm's second fund, CHB Capital Partners II, LP. The sale generated a 7.1x gross cash-on-cash return and a 25.9% gross IRR for CHB. The firm's October 2002 investment in HiRel was also its sixth investment in that fund.
Minnetonka, Minnesota-based HiRel Systems (www.hirelsystems.com) is a leading global designer and manufacturer of high reliability transformers, inductors, coils, and power conversion products for custom applications within the medical, military, aerospace and specialty industrial and commercial markets. The company was acquired by Vishay Intertechnology, Inc. (www.vishay.com) a Fortune 1,000 company listed on the NYSE (VSH) and one of the world's largest manufacturers of discrete semiconductors and passive electronics components.
“In the over nine years CHB was involved with HiRel, the company was able to grow its revenue and EBITDA by over 350%,” said John Flanigan, Co-founder of CHB. “At CHB we back strong, in-place management teams with the capital and expertise required for them to grow their businesses significantly faster than their industries. HiRel is a perfect example of this, a niche player in a global market that through investments in capability and select acquisitions was able to become a market leader. We couldn't be happier with the outcome nor with the experience of working alongside such a talented management team.”
Paul Larkin, President and CEO of HiRel Systems, said, “With CHB's support we were able to make three acquisitions, diversify our manufacturing base by adding plants in China and the Dominican Republic and make significant investments in lean manufacturing, information technology, and design engineering capability. This dramatic increase in scale allowed us to focus on the most attractive end-use markets and to take advantage of key trends in those markets favoring larger, more sophisticated providers.”
Lincoln International advised HiRel Systems in the transaction. Davis, Graham & Stubbs LLP provided legal counsel.
{complink 11191|CHB Capital Partners}
{complink 6199|Vishay Intertechnology Inc.}
“Apple's shares will crash. Do you expect this to happen?” No I don't believe either that is possible to happed now or in the near future. As you said where else to put their money? For the moment, Apple is one of the best options.
I read today that Apple's stock has tended to do this for several weeks before a product announcement. I think it will settle down again after we see what the iPad3 is all about.
The entire market is near a high, and has been seeing profit-taking across the board this week. It makes sense that Apple would be aprt of that, given the large holdings and high valuation. I suspect Apple will do well for some time yet.
Barbara, If the iPad 3 or iPad HD or whatever Apple introduces today is as well received as its previous products the stock will probably spike again and push through the current record level. This is expected already as demonstrated in the pre-market one percent increase in stock price today.
Eldredge, Correct. The market typically reflects performance for the economy and sales for the coming 12 month period so it's possible everyone is betting strong growth or recovery will happen over the next one year. In the case of Apple, the shares have appreciated so much over the last one year individual buyers may want to harvest their gains and then see where to jump in again. For large, institutional buyers holding for the long term, these troughs only represent buying opportunities.
I agree that many big institutions are probably keen to keep their money with Apple and to feed the hype to keep the share price elevated. However I must believe like any great star it must eventually supernova and collapse.
Apple has very good position and they should use this opportunity to diversify. They should also become major player in semiconductor – embedded processor, memory and others.
Apple sholud also make non-electroinc consumer products.
There's no appearance of Apple's valuation cooling based on this figures -$548.21. I envisage further profit if the new ipad3 hits the market in March. I don't think its investors will be ready to exit just yet particularly in the face of record high profits. Although for how long will Apple continue to ride high? Difficult to predict it seems. I think time will tell.
Apple's has become a casino stock as said in
http://www.huffingtonpost.com/2012/03/05/aapl-apple-stock_n_1322266.html
There're a few others once reached the $500b mark and none of them were able to sustain that value. I believe Apple is no exception, just as the climate prior to the dot-com, many of my colleagues in 1998 discussed jumping into stock market to make quick money and I warned them that the stock market could crash some day.
Maxmin, You may be right but why would people want to pull back from Apple now? Like you, I believe the stock has become speculative and the idea that Apple is doing something so extraordinary that it has redefined the business environment is silly. Many have viewed other companies in the same light before, including Google and Microsoft at one point. We can also add Facebook to the mix.
The involvement of institutional investors in Apple's case complicates valuation. Many of these have so much money to invest and few opportunities that the more they pile in the higher the stock price, kind of like feeding on themselves. When they go for the exit, which they will eventually, we'll be able to determine Apple's real value.
_hm, All of which they won't do. Investors will begin to question Apple's value once they diversify into all of the slower growing markets you mentioned. Apple indeed has a problem — it must continue to grow rapidly to maintain its high valuation and has to decide what to do with its growing pile of money.
Flyingscot, Could you take a stab at answering this question: When and why would the Apple star fade and be less compelling for investors? Of course, if you foretell this accurately and follow your own prescription, you would be very rich. 🙂
A reader had a different take on the issue of Apple's market valuation and whether or not Apple investors will retrace their footsteps. Jonathan Allen had the following to say in a message to EBN editors:
For me, a problem even more important than Apple's stock price is the company's labor practices. Will Apple continue to exploit foreign workers with overly long hours and lousy pay on top of unsafe working conditions? Unless this policy improves I will buy neither their stock nor their products, regardless of economic arguments or how “cool” their stuff may be.
Is Apple listening? If it is, it seems some of the actions the company has recently taken have not really convinced everyone the company is committed to a different labor system. What else should/can the company do?
News of the iPad3 was tempting. For the first time in a while, I inched myself towards buying the tablet PC from Apple. That was yesterday. Today, I wondered again why the purchase would make sense. The first reason was the hype about the display. The reports I have read indicate they are several times better than the iPad2 display. How tempting!
Then I pondered the price and how other tablets in the market perform the same functions but are so much lower in price. I have to say I concluded Apple's iPad is overpriced. I am not convinced yet to pony up $500 or more for a display.
@Hawk: stay strong! Resist temptation! Don't go into the light….
Think Again! You will not mistake. Apple is addictive and highly productive for that matter. Try it once.
Apple is addictive? Okay, I am out then. There's no benefit except to the drug pusher if someone becomes addicted to their products. I guess that's the same for Apple: the company wins a lot, suppliers a bit and customers pay too much for products that produce a great high but change nothing in their lives. Not for me!
Not so addictive for me 🙂 however, i think still loads of people will buy the new iPad still.
Keep it as cash on hand. It can never really hurt to have liquid assets. Especially in today's climate where M&A's are prime.
Bolaji, I think Apple will dominate because of a very significant factor. They put a lot of their money into R&D under the radar. Apple has huge recruiting power and the sex-appeal of a youthful image. I hate to say it, but as a former employee of MS, when WebTV hit the streets and then X-box, that was the last of the youth appeal. Zune was a me-too product and now webcams, mice, keyboards are no longer differentiators in the marketplace. So, watching MS stock is like watching paint dry, but watching Apple stock, is like inhaling the fumes of the fresh paint. It can make your head spin, your stomach queasy, and your mind boggle.