AIS gets an investor; Audax buys large stake of Hudson firm.

Byline: Lisa Eckelbecker

HUDSON - The Audax Group, an investment firm with offices in Boston and New York, has purchased a majority stake in Hudson-based office furniture maker AIS Inc., the companies reported yesterday.

Financial terms of the deal were not disclosed. AIS Chief Executive Bruce Platzman said the transaction allowed AIS to consolidate the ownership of the privately held business and obtain access to money for growth. The deal was closed after an exhaustive search on the part of AIS, he said.

"Audax was the company we felt most comfortable with," Mr. Platzman said. "They're looking for their growth and income not to come from employee consolidation or management consolidation but from organic growth or growth through acquisitions."

AIS and Audax reported that AIS senior management will remain in place, including Chairman Arthur Maxwell and Mr. Platzman. The company's senior management team will retain a significant ownership stake in the business. Mr. Platzman said no job cuts are planned.

Founded in 1989, AIS manufactures and sells furniture and cubicles for offices. The name stands for Affordable Interior Systems.

AIS employs about 325 people, posts about $100 million a year in sales and does most of its manufacturing in Hudson. The company provided office cubicles for a recent episode of ABC's "Extreme Makeover: Home Edition" that was shot in Hawaii.

Before the Audax transaction, AIS was owned by managers, private equity investors and individual investors not employed at the company, according to Mr. Platzman. Proceeds of the Audax transaction went to buy out outside investors and private equity investors, he said.

Audax, founded in 1999, has investments in a number of industrial companies across the country, according to its Web site. Geoffrey S. Rehnert, co-chief executive of Audax, said in an e-mailed response to questions that Audax was drawn to AIS because of its position in the "value" segment of the office furniture market.

"AIS plays in a niche segment of the market with a strong dealer base and efficient manufacturing which enables AIS to better serve the value segment," Mr. Rehnert wrote. "The value segment has experienced higher growth rates than the broader furniture segment."

Audax funded the transaction from its second private equity fund, which closed in 2005 with $700 million from investors. In a news release, the companies reported that Ropes & Gray advised Audax, while Lane Berry & Co. International LLC advised AIS in the deal. Sankaty Bank provided acquisition financing, the companies said.

With access to capital, AIS plans to expand its presence in the United States, Mr. Platzman said. The market for office interior systems and furniture is projected to grow 7 percent this year, he said.

The company has offices in most major U.S. cities, but could expand its presence to additional places or seek acquisitions to expand its product line, he said.

"There's nothing imminent right now, but it puts us in a position if we saw a company smaller than us or a company bigger than us that may benefit us as we move the product line forward ... we would have the capital structure to conduct those kinds of transactions," he said.

ART: PHOTO

PHOTOG: T&G Staff File Photo/PAUL KAPTEYN

CUTLINE: Team leader Nick Robinson, left, and assistant Edward Rodriguez, right, both of Worcester, spray metal office furniture at AIS.