The Business
Tewa Moulding is a leading manufacturer of high quality, small-pattern solid pine wood mouldings. Architects, builders and interior designers use small-pattern wood mouldings to add character to plain rooms. They enhance walls, windows, floors, doorways, and fireplaces, and can be used to break up a room horizontally, cover rough edges, hide flaws, or add a finished appearance to design transitions.

The company markets its products to building material distributors located throughout the United States. Tewa’s customers sell to building contractors, lumberyards and home improvement centers such as The Home Depot and Lowe’s. The company’s customer base covers the do-it-yourself (“DIY”) market and professional contractors, carpenters and other tradesmen.

The Industry
The millwork industry is broadly divided into four subcategories – doors, windows, mouldings and other – and accounts for approximately $17 billion in annual sales. The small-pattern solid pine moulding market is a $100 million niche within the much larger $1.8 billion moulding industry. The millwork industry has seen DIY retailers such as The Home Depot and Lowe’s grow to a position of market dominance among sources of end-user supply. The growth of these large retailers has in turn fueled the growth of their preferred suppliers. Tewa, as well as other strong niche manufacturers of millwork products, will continue to benefit from the rapid growth in large-format retailing.

The Process
Prestwick Partners initiated this transaction and acted as financial advisor to Tewa Moulding (Albuquerque, NM), Lynch Investment Company (Dallas, TX), and Private Equity Partners, Inc. (Ft. Worth, TX). Prestwick Partners designed an M&A process, prepared marketing materials, contacted prospective buyers, evaluated acquisition proposals and negotiated with a number of interested parties, including the ultimate purchaser. At the direction of our client, our process focused almost exclusively on financial buyers interested in acquiring lower middle-market businesses.