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Ohio Transmission Group
Industrial Distributor

Professionalizing and Growing a Family Business at Ohio Transmission Group

  • Industrial
  • 2013
  • Realized

In its 50 year history, Ohio Transmission Group (“OTC”) had been successful building up a high quality management team and establishing strong relationships with customers and suppliers alike.  At the time of Frontenac’s investment, the company had just rebounded from a recession and was seeking to grow geographically, expand supplier relationships, and increase margins. Challenges facing OTC included inherent cyclicality, vendor concentration, and professionalization.

OTC was a long-time family owned company that was well positioned to benefit from an institutional investor with an established track record of success in distribution. Frontenac set out to deploy key value creation playbooks around margin improvement, M&A, and consolidation.

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The mission with OTC was straightforward: help a very good business be even better. Frontenac’s investment thesis was focused on enhancing the product offering in existing markets, consolidating in fragmented markets, and driving margins to industry leading levels. We also sought to form an engaged Board of Directors that would compliment the accomplished, in-place team. In spite of a focused strategy plan, OTC had successfully grown organically and with some limited M&A. Frontenac worked with management to professional processes, establish near-term plans, and develop a long-term strategic roadmap.

Strategic pricing
Completed analysis and successful implementation of a strategic pricing initiative that was a key contributor to 20% growth in margins
Mix Shift
Pivoted revenue mix towards higher value products and services, with a focus on like-for-like replacement of wear-parts
Strategic M&A
Executed on a successful acquisition and consolidation strategy, enhancing product offering in existing markets and expanding geographically while expanding margins

“The team at Frontenac provided OTC with invaluable support in a variety of tactical as well as strategic issues. They brought an analytical approach to decision making that helped to support improved overall performance. Frontenac was not only thoughtful in their day-to-day support, but they engaged with management in a positive and productive way to overcome challenging situations.”

– Phil Derrow, Chief Executive Officer of Ohio Transmission Group

Disclaimer: The case studies described herein are for illustrative and discussion purposes only and have been selected to provide, among other things, examples of deal sourcing and investment strategy. A full list of investments is available from Frontenac upon request. Past performance is not necessarily indicative of future results. It should not be assumed that investments made in the future will be comparable in quality or performance to the investments described herein.