Created by Inc. Studio and commissioned by
From its 1999 founding in a barn in the heart of Kentucky horse
country, Material Handling Systems (MHS) embodied a deep
commitment to excellence in everything it did. That drive helped
make the company a leading provider of automation solutions
to the top courier and e-commerce companies in the world—and
one of the state’s fastest-growing companies.
But the team knew it needed the right strategic and fnancial
partner to help it expand and capture new opportunities. Years
before MHS began meeting with potential investors, Thomas
H. Lee (THL) Partners, LP, a Boston, Massachusetts-based
private equity frm, had begun exploring acquisitions in e-commerce infrastructure, confdent that the trend towards
online commerce demands improved logistics systems.
“We look at it as selling shovels to gold miners,” says Jim
Carlisle, a managing director at THL. The investors recognized
MHS as a leader and proactively reached out to the company’s founders.
NAVIGATING A SHARED HELM
Investing in a founder-owned company has some challenges
that other transactions don’t have. Remaining true to the
founders’ vision and culture can be important for maintaining
continuity. MHS’s co-founders had grown this company to a
successful $300 million enterprise. To ensure the right ft
between THL and its partners, the private equity frm developed a growth plan that was aligned with management and
designed to accelerate growth.
“To be successful in a competitive private
equity industry, you need to be more than
just a capital provider,” Carlisle says. “We
look at how we can infuence the trajectory
of the business through the application of
our talented resources,” he explains.
To do so, the frm uses the experience and
expertise of its Strategic Resource
Group—a subset of roughly 15 of the
frm’s most seasoned and successful
business experts. The SRG’s growth plan
is shared with company’s leadership
team. If the founders are onboard, the
deal may move forward. If they balk, it
might not be the right ft.
“THL was our partner of choice,” said Tony
Mouser, MHS’s co-founder, former CEO, and
current special project advisor. “We loved
their investment mindset and really appreciated their customized value creation
plan.” The deal was fnalized in April 2017.
Two years later, co-founder and COO Scott
McReynolds stepped into the CEO role.
Now named MHS Global, the company has tripled in size and
expanded its potential market by seven-fold through geographic and product expansions. New divisions include International, providing technology and services from their
European headquarters, and Lifecycle Services, which provides ongoing maintenance services, including predictive
analytics to drive consistent performance.
MHS has strategically acquired fve companies, including four
founder-owned frms, and integrated them into its existing
operations. A combination of senior leadership from acquired
companies, new complementary executives, and a focus on
developing internal talent gives MHS an exceptionally deep
bench of logistics and materials handling expertise.
“We are investing for a very exciting future,” McReynolds says.
“We had high expectations going in, but THL has over-delivered
on their promises to us.”
Carlisle credits the success to the private equity frm’s
founder-friendly ethic. “THL’s framework and culture make us
a good ft for founder-owners who already have a culture of
partnership and recognize that they can do more as part of
the broader platform than they might have been able to do by
themselves,” he says.
THL’S GROWTH APPROACH
A partnership mindset makes this frm a favorite with founders.