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Tuesday 25 April 2023

Arrowhead Engineered Products

Genstar Capital Moves to Shake Up the Senior Management at Arrowhead Engineered Products (AEP) with New CEO and CFO

In a mid-April release, the Board of Directors of San Francisco based Genstar Capital, the owner of Blaine, Minnesota based Arrowhead Engineered Products (AEP), announced what appears to have been the immediate termination of CEO John Mosunic's contract as CEO of AEP.

"We thank John Mosunic for his leadership and dedication to the organization during his tenure. We wish him all the best in his future endeavors."

New Arrowhead CEO Bill Canady

Mosunic was at the helm when Genstar acquired AEP from Riverside in 2021, and was the CEO who, under Genstar's ownership, oversaw rapid expansion with the acquisition of Western Power Sports (WPS - Boise, Idaho; Fly Racing, HardDrive etc.) and Bihr, one of Europe's largest (largely 'mainstream'/'metric') parts and accessory distributors in 2022.

Genstar moved quickly to announce that Mosunic was being replaced by Bill Canady ("effective immediately"), saying that "Bill has led several organizations to unprecedented growth" and that he is a "proven leader with a track record of driving results through innovation, strong business insights and financial discipline" - including at OTC Technologies - a provider of "industrial and manufacturing solutions" and a member of the Genstar Capital group of owned companies.

Canady is quoted as saying: "I'm pleased to have been chosen to lead Arrowhead, a company with an incredible workforce and loyal customer base. With the confidence of the board and in partnership with the leadership team, we will improve our business performance, continue to take market share and deliver long-term value for all our shareholders. I'm confident that our best days are ahead."

Speaking for AEP, Rebecca Shaffer, Senior Director of Communications, told AMD: “Arrowhead Engineered Products is embarking on its next growth phase. With over 30 years of global business leadership experience, Bill Canady's proven track record of successfully leading industrial businesses for Genstar Capital-sponsored companies means he is the right leader to take the organization to the next level. He will continue in his leadership role across other Genstar portfolio companies working to drive growth across the businesses.”

As CEO, Canady has acted equally quickly to appoint Adam McMahon as CFO, with existing CFO Jim Buckelman "remaining in his role for the next six months to ensure a smooth transition."

Genstar went on to say: "Over the next 100 days, Bill will focus on improving revenue, EBITDA and business performance. The recently announced Global Operating Model is paused as we concentrate on executing the day-to-day basics."

Founded in 1988, Genstar is a big player in the "private equity space" with some $35bn of assets "under management." It says it is currently managing its tenth fund "and actively looking for investment opportunities in founder-owned companies, public company orphans, corporate carve-outs and traditional buyouts."

Describing itself as a "leading global engineer and omnichannel distributor of non-discretionary, proprietary branded, aftermarket replacement parts," AEP "leverages data and digital capabilities to provide mission-critical parts for powersports and adjacent markets, such as outdoor power equipment, golf cars, specialty vehicles, agriculture and other diverse markets." AEP cites having distribution and sourcing locations in North America, Europe and Asia, servicing over 100,000 customers globally.

In addition to WPS, AEP numbers several other American powersports businesses and brands in its ownership, including the All Balls Racing program, Cylinder Works, Hot Cams, Hot Rods, Pivot Works and Tiger Lights.

In Europe, Bihr had already been on the acquisition trail prior to itself being bought by AEP - owning Paaschburg & Wunderlich and LSL in Germany, and the Moto Direct/RST apparel operations in the UK. AEP also owns Vertex Pistons in Italy and motorcycle parts distributor H-I Level Enterprises in the UK.