Auburn Gear Ownership Changes Hands

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DeKalb County-based Auburn Gear Inc. has been acquired by an equity capital firm in Fort Wayne. North River Capital LLC says all 170 employees will be retained and Marty Palmer will remain president of the manufacturer. In June, Auburn Gear signed distribution deals with companies in the United Kingdom and Russia.

September 11, 2014

News Release

FORT WAYNE, Ind. (September 8, 2014) - North River Capital, LLC, a Fort Wayne, Indiana based equity capital firm, announced today that it has acquired a majority interest in Auburn Gear. Partnering with North River in the transaction were F.N.B. Capital Partners, a Pittsburgh, Pennsylvania based SBIC Investment Fund, and Marty Palmer, current President of Auburn Gear. First Financial Bank, headquartered in Cincinnati, Ohio, and F.N.B Capital Partners provided financing for the transaction. The business was purchased from the George Callas family, who had owned and operated the company for over 30 years.

Auburn Gear, located in Auburn, Indiana, is a leading designer and manufacturer of custom engineered wheel drives, axle drive components, and specialty drives for diverse mobile equipment applications and automobiles. Through its expansive product portfolio of planetary gearboxes, electric drive systems, driveline systems, and differentials, Auburn Gear offers more than 120 base product models covering over 3200 applications that transfer power and torque to wheels, axles, booms, augers, winches and platforms. The company is known for custom engineered solutions, short lead times, outstanding customer service, quality, and attention to detail in its products and services. For more information about Auburn Gear, visit its website at www.auburngear.com.

Mr. Palmer will continue to lead the organization as President. All of the company's 170 employees, including its executive management team, are continuing with the company, ensuring a seamless transition.

In talking about the future of Auburn Gear, Palmer said, "We are excited to be partnering with North River Capital and believe this transaction will be beneficial to our continued strategic growth, our customers and our employees. North River Capital's culture and business philosophies are a good match with Auburn Gear's, which will continue to support our emphasis on providing our customers with innovative drive solutions designed for their specific requirements, the highest level of technical support, continued quality brand performance, along with the shortest lead-times in the industry."

In discussing the deal, George Callas said, "I believe that the acquisition of Auburn Gear by North River Capital is very good for the Company and for its employees. Being a local firm enables them to work closely with the Company to support growth and to be sensitive to the needs and concerns of its employees."

Danny Rifkin, a principal of North River Capital, commented, "We're very pleased to have Auburn Gear join our growing portfolio of companies focused on core industrial manufacturing. Auburn Gear has an outstanding reputation, a history of innovation, and a demonstrated ability to produce solid financial results, even in volatile periods. We are looking forward to the opportunity to help the organization effect its growth strategy."

Stephen Gurgovits, the Managing Partner of F.N.B. Capital Partners, added, "We are grateful for the opportunity to invest in this transaction and to help support the strategic initiatives of the company. The combination of North River and Mr. Palmer and his management team will create the dynamic leadership to propel Auburn Gear through its next evolution of growth."

Brown Gibbons Lang & Company acted as financial advisors to the sellers North River Capital LLC is a privately-held equity capital firm located in Fort Wayne, IN. Founded in the summer of 2008 by members of the Rifkin family and other former OmniSource executives, the firm's investment strategy is primarily focused on the acquisition of majority ownership in companies with significant growth potential.

F.N.B. Capital Partners, L.P. is a $175 million pooled fund of committed capital licensed by the Small Business Administration as a Small Business Investment Company (SBIC) Fund. The FNBCP, headquartered in Pittsburgh, PA, invests $3 million to $15 million per transaction. The FNBCP specializes in providing mezzanine debt, subordinated notes, private equity and other types of financial capital to small and medium size commercial enterprises for the purposes of recapitalizations, buyouts, generational transitions, mergers and acquisitions and other growth capital. For more information, please visit www.fnbcp.com.

Source: North River Capital LLC

News Release

Originally Distributed June 20, 2014

AUBURN, Ind. - Auburn Gear, Inc. has added two new distributors to its network - Hydraulics & Transmissions Ltd (HTL) to cover U.K. and A.I.S. Engineering LLC (AISE) to cover Russia.

HTL, based in Ludlow, Shropshire, UK, specializes in the design, supply, and commissioning of hydraulic systems for mobile vehicles in the agricultural, construction, marine, material handling, and rails sector. HTL will be working alongside longtime UK distributors, Primary Fluid Power and Driveline Systems, and will initially focus on the agricultural market

Moscow-based AISE will be covering Russia's various mobile vehicles and stationary markets.

"With the addition of HTL and AISE we will have presence in ten European markets. We will continue to work to appoint distributors in other countries to have complete coverage," said Edward Hendler, Driveline Systems & Export Account Manager.

Source: Auburn Gear Inc.