Trachte’s buildings are used to house electrical components that control and protect electrical infrastructure, such as transmission and distribution substations. In addition, Trachte buildings are used in industrial applications to house equipment such as relay and protection controls, switchgear, battery systems, servers, and data center hardware that control and protect electrical infrastructure and equipment. Trachte customers include utilities, OEMs, and other companies active in the power generation, energy, chemical processing, data center, and general industrial end markets. The company is headquartered south of Madison in Oregon, WI (www.trachteusa.com).
Morgenthaler Private Equity partnered in the transaction with the existing shareholders of Trachte including retiring President Randy Trachte and retiring VP of Sales Ron Trachte, as well as other members of the company’s senior management team. Randy and Ron Trachte are third generation owners of the company which was founded in 1919 by George and Arthur Trachte.
Upon closing of the transaction, Matt Cahill will join the company as its new CEO. Mr. Cahill is an experienced operating executive. Paul Holmes, the current Vice President Manufacturing Operations and a 25-year Trachte employee, will become Vice President and Chief Operating Officer.
“Trachte has developed a tremendous reputation for product quality, engineering and project management support, on-time delivery, and customer service,” said Joe Machado, a Partner at Morgenthaler. “We are excited to partner with Matt, Paul, and the rest of the Trachte organization as we help the company continue its growth.”
Alliance Partners (www.alliancepartners.com) provided senior debt financing to support the transaction. Hartford Investment Management Company (www.himco.com) and Siguler Guff (www.sigulerguff.com) provided subordinated debt financing.
“Our grandfather began manufacturing prefabricated metal buildings in 1919,” said Randy and Ron Trachte in a released statement. “Over our past 40 years of ownership with Trachte, we have had the privilege of working with our employees to build great relationships with customers and suppliers by delivering on our commitments. We were very selective in choosing an investment partner for Trachte and believe Morgenthaler will be a great steward for the company and its legacy.”
Morgenthaler invests in companies in the lower middle market that have transaction values up to $150 million and EBITDAs between $5 million and $20 million. Sectors of interest include high-value manufacturing and proprietary business services. The firm has $3 billion of capital under management and has offices in Cleveland and Boston (www.morgenthaler.com).
Milwaukee-based investment bank Cleary Gull (www.clearygull.com) was the financial advisor to Trachte.
© 2015 PEPD • Private Equity’s Leading News Magazine • 10-19-15