Creating Standalone Business Infrastructures

Fasloc was owned by DuPont, who developed Fasloc’s products to complement DuPont’s mine explosives business. At the time of the transaction, Fasloc operated as a manufacturing plant with key support functions including finance, insurance, and benefits handled by DuPont corporate. Fasloc operated on DuPont’s centralized SAP system, with all major IT capabilities run by DuPont.

At closing, Fasloc was unable to operate as a standalone business. To function independently, Fasloc needed to:

• Evaluate, purchase, and implement a completely new IT backbone
• Hire a CFO and manage all aspects of the finance function previously provided by DuPont
• Establish standalone insurance and benefits similar to those provided by DuPont}

Importantly, all of this would need to be accomplished while Fasloc was undergoing a rapid expansion without causing any customer or manufacturing disruption.

• To acquire the leading industry brand and established leader in a growing niche market fueled by a favorable growth outlook for the coal industry
• To invest in a platform business with a long history of profitability, a high return on net invested capital, and attractive free cash flow
• To partner with Fasloc’s committed and highly experienced senior management team

Smooth Transition to a Fully Standalone Business: Before the closing, management and Sentinel developed a detailed plan to quickly and seamlessly transition to a fully standalone business. One of Sentinel’s executives functioned as interim CFO and worked closely with management to oversee installation of the systems necessary to establish the business as a standalone entity. Within 90 days of the closing, Fasloc had hired a permanent CFO, installed a new IT system, and developed standalone insurance and benefits programs mirroring those previously provided by DuPont. As a result, Fasloc was no longer dependent on DuPont for transition services. All of this was accomplished with no disruption to the business—in fact, Fasloc generated record sales and earnings every month of the transition.

DYWIDAG-Systems International, a leading European mining and tunneling systems manufacturer, made an unsolicited approach to buy the business. DYWIDAG had important strategic reasons for wanting to own Fasloc and was willing to pay a preemptive price. In consultation with management, Sentinel agreed to a sale, which produced a significant gain for all investors.