Case Study: Tech Lighting

In 1998, Dixon Midland Fund I acquired Tech Lighting, a designer and manufacturer of architectural lighting systems. Under Dixon Midland’s ownership, Tech Lighting’s revenues grew at 28% annually, cash flow grew at 30% annually, and Tech Lighting became the category leader in product quality, product innovation, on-time shipments and customer service. Dixon Midland sold a majority interest in Tech Lighting in 2004 and exited the investment in 2006.

Actions Dixon Midland took to improve Tech Lighting included:

Strengthening the management team, including hiring an executive who trained for and became President

Communicating clear performance targets and offering incentives to hit those targets through stock options and annual bonuses

Doubling Tech’s customer base by upgrading its independent sales agency network

Overhauling the design and organization of Tech’s marketing materials

Successfully launching a new brand into Lowe’s

Prioritizing product development and launching approximately 1,500 new sku’s over 5 years, including T-trak, a revolutionary track lighting system that won the 2003 LightFair Design Excellence Award

Reducing shipment lead times from 4 weeks to 4 days by implementing a Japanese 5S organizational philosophy and a detailed sku-by-sku forecasting and inventory system

Systematically improving product quality and reducing product costs by upgrading the supplier network, including developing a high-quality, highly responsive supplier in China

Successfully installing a world-class ERP system

Acquiring a small complementary business

Sales and EBITDA ($ millions)