Hello all,
Many of you know me and some of you haven’t had the chance yet as I’ve been away growing our European operation for the last few years.
Nevertheless I’ve been in the background publicly but heavily involved in APR as a whole, the best I can from across the Pond.
My daily duties growing a business segment keep me rather busy but I simply cannot sit by and watch a company I’ve helped grow to nearly 10x its size since I began continue to be misunderstood any longer.
Those of you who have been involved in rapid growth industries yourselves are aware of the growing pains companies sometimes face when as successful as APR and understand the requirement for outside cash injection and leadership assistance when continuing to grow further.
Transitions of this kind do often require change, and simply the change itself can be alarming for many involved.
I, myself, had my doubts, sure, but I never saw a need or a benefit to taking it public. And I’m glad I’ve held on to those concerns with greater discipline than others may have as I’ve learned in just a short time how much better what you thought you had really can be when your team gets some new star players.
Enter Mangrove…
I’ve read the forums, the Facebook groups and even seen many of my friends speculating about slice and dice, pump and dump tactics from equity partners and how that can ruin an organization that previously excelled in its field. I must say I’ve read most of this with skepticism but in darker moments, even with a little bit of fear and trepidation that these ugly accusations could actually become reality.
But I’ve hung in there. I’ve given them time. I’ve explored my options as one would and I’ve touched base to gauge the thoughts of others into the validity of these claims. I’ve spoken privately with some of the same people who are publicly denouncing the opportunity APR has for the future and, yeah, at times they got me going too.
But most importantly I’ve observed.
I’ve employed quantitive measurements.
I’ve sat back to see what happens.
The last couple of days have been a defining moment for me as I’ve tallied my sheets, absorbed the plan and then received an internal communication from our new CEO.
And I’m in. Not just feet wet but 100% convinced that the future holds great things for APR.
I know there are going to be a lot of follow up questions after this post and I’ll be about to answer whenever I can.
I don’t think anyone at APR will mind that I’m sharing this but here goes anyways. You all want to know what’s really going on so I’ll give it to you…
PRIVILEGED AND CONFIDENTIAL
PREPARED AT REQUEST OF COUNSEL
Draft – 9.22.14
APR INTERNAL MEMO TO EMPLOYEES
All,
I have had a chance to speak directly with most of you in the last couple of weeks, and it’s been an honor and a pleasure to get to know you. Each of you brings passion, ingenuity and incredible work ethic to your jobs every single day, and our company – and most importantly, our customers – benefit from it. So, first and foremost, thank you.
Transparency is a hallmark of my management style and a bedrock of how we operate at Mangrove Equity Partners. ln light of some rumors and misinformation floating around regarding the current status of APR, I want to correct the record and relay some information about Mangrove Equity Partners, our investment in APR, and some of my thinking on this company and its future.
A little background on Mangrove for those of you that may not be familiar. I, alongside Glenn Oken and Hunter Reichert, launched Mangrove in 2006. We are a Tampa, Florida-based private equity firm, and collectively we bring over 50 years of experience partnering with companies just like APR. In our business model, we do much more than write checks – we are operationally focused and seek to collaborate with management teams to grow businesses and build value for everyone. Contrary to comments in some forums, we are not “corporate raiders” and we are not guys who sweep in to “pick up the pieces.” Rather, we partner with managers and owners to grow their businesses, as we did with APR six months ago. Sometimes our partnerships require more direct operational involvement. Presently, this is the case with APR.
Mangrove has had considerable success investing in companies within the automotive aftermarket and other enthusiast-driven consumer product companies and we think we have an opportunity to continue that success at APR.
In 2002, we made a significant investment into a company that designs and distributes custom aftermarket wheels and specialty tires. We partnered with the owners to support organic growth, develop branded products and make strategic acquisitions. Working alongside the existing team, we:
• Doubled locations and launched several new brands
• Acquired two branded wheel companies
• Enhanced the existing management team, allowing founders to focus on strategic growth
• Grew revenue at a 15% compound annual rate over 4 years.
Another one of our partnerships was with Excalibur Crossbow, a designer and manufacturer of high-end hunting crossbows and accessories. The owners were looking for a partner to support growth in the U.S., and build a U.S. sales and marketing organization. We made a significant investment in the company and in partnership with the owners, we successfully:
• Established a U.S. sales and marketing company, built a U.S. sales organization, and developed a U.S.-focused marketing plan that leveraged the value of the Excalibur brand and allowed the company to dramatically grow sales
• Developed a new line of bows that revolutionized recurve bow technology and design
• Introduced new manufacturing concepts that doubled the capacity of the existing plant and workforce
• Doubled revenue in four years
So what does that mean about Mangrove’s investment in APR?
We made this investment because we think APR is a great company with a bright future ahead of it. Although we would have preferred that certain decisions were handled differently in the past, we are here now because we are confident APR has tremendous potential for success and that with the right strategy, we have the opportunity to grow the business and build value for all of the Company’s stakeholders. Obviously some changes will be required in order to continue to grow this company over the long-term, but I have the utmost confidence in the talent and dedication of this team.
In terms of our outlook for the company, we have no intention to lower the standards of our products to “boost profits” nor do we have any plans to “gut” the business, as some uninformed speculation in the marketplace has alleged. That is not how we operate at Mangrove and our track record speaks to that. I also want to reiterate in no uncertain terms that the company is not failing to pay its bills, nor is it “slashing and burning” to cut costs. In fact, the company has significant available cash, is current in its obligations and continues to invest heavily in new products, increased inventory, and its new manufacturing/R&D facility. We are not cutting our top-end hardware line. In fact, our development pipeline contains several years’ worth of projects.
We have a straightforward strategy at APR: To make great products that make cars go faster and make our customers happy. We have the right people in place to continue executing that plan.
APR is known for the best performance software and hardware in the world and we will work day and night to continue that tradition of excellence. Mangrove is here to facilitate good decision-making, foster collaboration, and ensure the long-term growth of the business. There may be bumps in the road along the way, but if we remain focused on delivering the highest-quality, best-performing products available, I think we all have a tremendous opportunity ahead of us.
I want to thank all of you for your continued support and dedication to APR and I look forward to working with you.
If you have any questions, any concerns or just want to discuss an idea or thought you may have – my door is always open.
Respectfully,
Matt Young
CEO
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