| Home > Portfolio > Case Studies > Omega Cabinets Ltd., Inc. |
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Waterloo, Iowa
Manufacturer of cabinets, vanities and accessories
Investment Date: June 1994
Exit Date: June 1997
www.omegacab.com |
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Founded in 1977 in Waterloo, Iowa, Omega Cabinets designed and manufactured custom and semi-custom kitchen cabinets, bathroom vanities and accessories. A company with humble beginnings in an Iowa barn, Omega had become a leading manufacturer that sold its products through a national network of kitchen and bath dealers, for use in the residential remodeling market and, to a lesser extent, in new residential construction.
Through financial advisors, the founder contacted CHS in 1994. His goal was to create partial liquidity for his stock, broaden the management team and position the company to grow in value through internal expansion and acquisition. Working with the founder, CHS recruited a new management team including a Chief Executive Officer, a Chief Financial Officer and a Vice President of Operations shortly after acquiring the business. The founder remained Chairman of the Board of Directors.
The new executive team worked quickly to develop and implement improved management information systems and more effective financial controls. CHS worked with them to embark upon a comprehensive growth strategy that included geographic and product line expansion and industry consolidation through acquisition. Omega had significant competitive advantages resulting from low cost manufacturing, broad distribution channels and low working capital requirements which allowed rapid, profitable growth.
Along with senior management, CHS evaluated numerous add-on acquisitions. In May, 1995, Omega completed the acquisition of HomeCrest Corporation, a leading stock cabinetry brand. The acquisition nearly doubled Omega's revenues and added a stock cabinetry line to round out Omega's product offering. There also were significant operational synergies between these two businesses. Through agressive and internal growth, CHS oversaw a meaningful increase in Omega’s dealer base and an expansion of Omega's distribution channels into home centers.
Omega's earnings grew from $10 million to $27 million in three years. |
Case Studies have been selected for illustrative purposes. The specific portfolio companies identified are not representative of all active or prior CHS Capital portfolio companies;
results may not be typical and it should not be assumed that investments in other portfolio companies will be or were as profitable. For complete listings of active and prior
portfolio companies please visit the "Portfolio" section of the website. Investments in a fund involves significant risk, including loss of the entire investment.
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