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	<td height="29" colspan="3" background="../images/gradientbar.gif" class="breadcrumb"><a href="../index.html">Home</a> &gt; <a href="index.html">Portfolio</a> &gt; <a href="case.html">Case Studies</a> &gt; <a href="case_tharco.html">THARCO Holdings, Inc.</a></td>
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	<td align="left" valign="top" class="caseFacts">San Lorenzo, California<br>
	Leading independent manufacturer and distributor of corrugated and engineered foam packaging solutions in the western united states<br>
	Investment Date: June 1998<br>
	Exit Date: July 2005<br>
	<a href="http://www.tharco.com/" target="_blank">www.tharco.com</a></td>
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	<td align="left" valign="top" class="teamBodyJustify">In 1998, THARCO Holdings, Inc., was the leading independent manufacturer and distributor of corrugated and engineered foam packaging solutions in the Western United States. With sales of $125 million and seven locations, the company had been owned and operated by the Aitchison family since its founding in 1952. The Aitchison family sold a majority equity interest to CHS after seeking a partner to facilitate an estate planning transaction and conducting rigourous due diligence on CHS. At that time, CHS had completed over fifty estate planning transactions, allowing owner-operators to diversify concentrated risk positions, remain significant shareholders and continue in senior management roles.<br>
<br>
Tharco presented an opportunity to work with the Aitchison family to extend Tharco’s profitable, niche focus in the highly competitive corrugated box industry and to generate incremental profitability through operating improvements. Our partnership with the Aitchison family allowed the company to retain valuable customer relationships, deep market knowledge and an entrepreneurial culture as CHS oversaw the transition from a family-owned company to institutional ownership.<br>
<br>
Within a year of closing, CHS oversaw the acquisition of Thacker Container Company, the company’s largest independent, West Coast competitor. The acquisition brought Tharco a substantial presence in Southern California, strong customer relationships and a unique, new product line. CHS also oversaw the implementation of improved reporting and financial controls, compensation-based compensation structures for key employees and the addition of sophisticated management talent in numerous operating areas.<br>
<br>
As a result of the general economic downturn that began in 2000, the corrugated box market experienced a three-year decline in box volume from 2000 through 2002. The downturn was particularly acute in Northern California where Tharco had a concentration of sales to technology companies. In response, senior management, with support and oversight from CHS and the Aitchison family, undertook several major initiatives to improve performance and reinvigorate sales growth. CHS recruited Bo Fears, a 25 year corrugated industry veteran, to become Chief Executive Officer. Bo quickly identified several areas for operational improvement, cost savings and revenue enhancement. The aggressive strategic plan yielded positive results, invigorating management, other employees and the company’s lenders.<br>
<br>
When the industry recovered, Tharco emerged with market leading positions, low cost manufacturing, a lean organization and a talented and aggressive sales team. 
Recognizing that outstanding execution by the management had resulted in Tharco becoming an attractive platform from which to build a national competitor, 
CHS and the company retained an advisor to market the company. After a broad auction, CHS sold Tharco to a financial sponsor with experience in the packaging industry.</td>
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<br /> <i><font size=1 face="Arial Narrow" style="text-decoration:none; line-height:normal">Case Studies have been selected for illustrative purposes.  The specific portfolio companies identified are not representative of all active or prior CHS Capital portfolio companies; 
	results may not be typical and it should not be assumed that investments in other portfolio companies will be or were as profitable.  For complete listings of active and prior 
	portfolio companies please visit the "Portfolio" section of the website.  Investments in a fund involves significant risk, including loss of the entire investment.</font></i><br />&nbsp;<br />
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	<td colspan="7" class="footer">2010 CHS Capital&trade;. All Rights Reserved. <i>Past performance is not necessarily indicative of future results.</i></td>
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