Target Information

Custom Wheel House LLC (CWH), based in Los Angeles, California, specializes in the design, marketing, and distribution of branded automotive aftermarket wheels, performance tires, and accessories. The company operates under several well-known brands, including Method Race Wheels, Tensor Tires, GMZ Race Products, and Dusty Times. Since its inception in 2010, Method Race Wheels has established itself as a leader in high-performance wheels and accessories tailored for both racing and street applications. CWH's strong focus on quality and performance is deeply rooted in the passion of its team, who are avid racing enthusiasts.

Method Race Wheels sets itself apart by employing rigorous engineering standards, extensive testing, data collection, and a commitment to pushing the boundaries of what is possible. Tensor Tires is recognized for its high-performance ATV and UTV tires, designed for optimal performance across all terrains. Similarly, GMZ Race Products manufactures top-quality wheels and tires for the current ATV and UTV markets, earning high praise from top athletes and off-road enthusiasts. Furthermore, Dusty Times serves as a specialized publication dedicated to desert racing, providing engaging content from industry experts.

Industry Overview

The automotive aftermarket industry in the United States is thriving, characterized by robust growth rates driven by increasing consumer demand for vehicle customization and performance enhancement. This sector encompasses a wide range of products and services including wheels, tires, accessories, and aftermarket modifications.

With the rising popularity of off-road vehicles and recreational activities, brands like Method, Tensor, and GMZ are well-positioned to capitalize on expanding market opportunities. The growing trend of personalization in automotive culture propels consumers toward higher-quality, performance-oriented products designed for both recreational and competitive uses.

The U.S. is home to a vast community of off-road enthusiasts, which provides a fertile ground for brands that can engage effectively with this audience. This engagement is further enhanced through social media platforms where brands can showcase their products and build a following among dedicated fans, contributing to the industry's overall success.

As the industry continues to innovate and evolve, companies that prioritize product quality and customer experience, like CWH, are expected to thrive amidst competitive pressures, solidifying their market presence while expanding their product offerings.

Rationale Behind the Deal

Thompson Street Capital Partners (TSCP) aims to leverage its expertise in scaling companies through improved digital marketing, expanded sales efforts, and strategic add-on acquisitions. Given the robust growth potential within the automotive aftermarket sector, particularly for off-road products, partnering with CWH presents an opportunity to accelerate the growth trajectory of its brands.

Kevin Fitzgerald, CEO of Method, emphasized the importance of aligning with a growth-focused equity partner that resonates with the company's founder mentality. After evaluating several options, TSCP emerged as the ideal choice to help elevate CWH to new heights.

Information About the Investor

Thompson Street Capital Partners is a St. Louis-based private equity firm renowned for its successful investment in middle-market companies across various sectors. TSCP typically partners with management teams to drive growth and create value through strategic initiatives and operational improvements.

With a commitment to enhancing digital strategies and expanding market reach, TSCP has a history of empowering companies to realize their full potential and achieve sustainable growth. Their focused approach to investing aligns well with CWH's ambitions for expansion in the dynamic automotive aftermarket industry.

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In my expert opinion, the acquisition of Custom Wheel House by Thompson Street Capital Partners could prove to be a highly advantageous investment. CWH's strong brand presence in the off-road market, paired with TSCP's growth-oriented strategy, sets the stage for significant upward momentum. The targeted focus on improving digital marketing and expanding sales capabilities could result in enhanced customer engagement and increased revenues.

Moreover, the existing passion and commitment within CWH's leadership team toward performance excellence place them in a robust position to capitalize on the growing consumer enthusiasm for automotive customization and off-roading. This synergistic relationship between TSCP and CWH has the potential to unlock a range of new growth avenues.

Finally, as the automotive aftermarket continues to experience growth, investments that prioritize quality and innovation, such as those seen in CWH’s brands, are likely to yield favorable returns. Therefore, this deal presents a prospect of solid financial performance, driven by a commitment to expanding market share within a lucrative and expanding industry.

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