Gryphon makes a 2.5x return on MSD exit

San Francisco’s Gryphon Investors has completed a $141 million sale of fuel ignition systems manufacturer MSD Ignition, less than 12 months after acquiring it.

San Francisco-based private equity firm Gryphon Investors has sold El Paso-based MSD Ignition to the company’s management and ValueAct Capital, a San Francisco-based hedge fund, for $141 million (€108 million), just one year after its April 2004 purchase.  

The transaction yielded a cash return of 2.5 times Gryphon’s investment and an IRR of around 175 percent, according to a statement released by Gryphon. The firm invested approximately $30 million in equity in the company in April 2004, according to a source close to the deal.

“We proactively targeted the performance automotive parts industry as attractive, saw the considerable potential in MSD and put steps in place to improve MSD’s manufacturing and distribution capabilities,” said David Andrews, president and managing partner at Gryphon, in a statement.

MSD Ignition develops high-performance automotive ignition systems for motorsports, including NASCAR, NHRA and IRHA drag racing, SCORE off-road racing and World of Outlaw sprint cars. Dan Gresham is the chief executive officer at MSD Ignition.

Earlier this year, MSD Ignition acquired Sanford, Florida-based Superchips, which manufactures chips for late model production cars and trucks.  

Gryphon is a middle market private equity firm founded in 1995 by David Andrews, formerly managing director at Oak Hill Partners. The firm typically invests between $25 million and $75 million in companies in the business services, retail, industry and technology sectors.