EPTAM Plastics founder sells interest in company; private equity-financed transition leaves management team in place

NORTHFIELD — The management team of EPTAM Plastics, Ltd., in partnership with New Heritage Capital, LLC, an affiliate of the Heritage of Boston private equity firm, has acquired the equity interests of Dick Dearborn, the founder of the firm, and his family, who have retired from the business. The terms of the transaction were not disclosed.

In an announcement to employees, Jeff Hollinger, president of the company, explained that the Dearborns chose to "see the company carry on in the hands of the management team that has served you over the many years." He added that "the Dearborns have been the type of owners you only dream about; honest, caring and generous, dedicated to helping make EPTAM the best place to work." With its generous benefits and collegial culture, EPTAM has regularly ranked among the best employers in the state.

EPTAM machines and fabricates plastic components to exacting specifications and fine tolerances for a variety of applications in the semiconductor, aerospace, medical, industrial and energy sectors.

Apart from affecting the transfer of ownership, which provides the Dearborns with liquidity, Hollinger stressed that the investment by Heritage represents a recapitalization of the company that positions it for future growth. "I would like to see the company double in the next five to six years," he said. "I'd like to see us operating 24 hours a day, seven days a week."

Heritage will own 70-percent of the stock in the company while the management team and Dearborn family have also invested in the recapitalization. Bigelow, LLC of Portsmouth, a merger and acquisitions firm, provided investment banking services to EPTAM and the Bank of New Hampshire provided the debt financing.

Heritage specializes in investing in successful, mature enterprises owned by their individual founders or founding families, often through low leveraged management buyouts. "They look for consistently profitable, well managed, growth oriented companies to take to the next level," Hollinger said.

In a prepared statement, Hali Dearborn, vice-president of corporate responsibility, said that "the Dearborn family is proud to have grown EPTAM over the course of the past three decades by continually reinvesting in the business and putting the customer's needs first. We are extremely pleased to find an investor in Heritage that understands our unique culture ," she continued, "and we believe they will be great stewards of the company for years to come."

Hollinger described the transition as "ideal", noting that the company will remain in Northfield and keep its name. Heritage, he said, is a successful firm experienced in working with manufacturers, particularly in the precision machining sector. "They take a hands -off approach," he remarked, marked by monthly meetings with management, quarterly meetings of the directors and an annual meeting. Above all, Hollinger said that Dick Dearborn will always be welcome at the company's facility whenever he wishes to come. "We all love him," he said. "he is one of those special people who always make you feel better about everything."

Dearborn began EPTAM in 1981 with just two employees working in a shop in Gilford. Today the company employs 117 people in its 60,000-square-foot facility on Rte. 140. Hollinger, who has been with the firm for 22 years — the last 10 as its president — said the company has grown at an annual compounded rate of 10 percent and has consistently posted profits.

"We're competing in a $1 billion industry and our share is 2.5 percent," he said, "which offers lots of opportunities for growth." Currently diverse industrial applications represent 30 percent of the company's business while semiconductors account for 21-percent, medical 17 percent and energy and aerospace 16-percent apiece.

With the recapitalization the firm will hire a chief operating officer, who Hollinger said will "help us get to the next level as well as be my potential successor. I won't have done my job," he continued, "unless there is someone here who can do a better job than I did."