Electrical Components International, a portfolio company of KPS Capital Partners since May 2014, has acquired Fargo Assembly Company. Closing of this transaction is expected in the first quarter of 2017.
Fargo is a supplier of heavy duty, complex wire harnesses used by motorcycle, agriculture and construction equipment and specialty transportation OEMs. The company, headquartered in Fargo, ND, has approximately 1,900 employees and operates 16 manufacturing facilities in the US (seven located in North Dakota, four located in Pennsylvania and one located in each of Kansas, Mississippi, Missouri, and Nebraska) and has one manufacturing facility in the UK (www.facnd.com) (www.fargoassemblyeurope.com).
Electrical Components International (ECI) is a manufacturer and marketer of wire harnesses and provider of assembly services for the home appliance industry and other end markets. ECI has over 850 customers globally and its products can be found in a variety of electronic and electro-mechanical applications, including home appliances; agriculture and construction; HVAC; specialty transportation; automotive; commercial appliance; and commercial electronics. ECI was founded in the 1950s and is headquartered in St. Louis with 19 manufacturing facilities in seven countries. The company has over 15,000 employees worldwide (www.ecintl.com).
Fargo is ECI’s third acquisition under KPS’ ownership. ECI acquired Global Harness Systems in 2015 and Whitepath Fab Tech in 2016. “We are very proud of ECI’s extraordinary transformation to date under KPS’ ownership. KPS acquired ECI in 2014 as a platform for organic and strategic growth in the global wire harness industry,” said Raquel Palmer, a Partner of KPS. “We have significantly expanded ECI’s presence in specialty-industrial end-markets and maintained ECI’s industry-leading position in the appliance end-market. ECI is poised to leverage its platform to aggressively pursue new business opportunities with existing and new customers in both North America and around the world.”
KPS Capital Partners is the manager of the KPS Special Situations Funds, a group of private equity funds with approximately $5.6 billion of assets under management that invests in restructurings, turnarounds and other special situations. KPS targets manufacturing and industrial companies that are going through a period of transition or experiencing operating or financial difficulties. The firm’s portfolio companies have aggregate annual revenues of approximately $6 billion, operate 98 manufacturing plants in 23 countries, and employ over 42,000 people worldwide. KPS Capital Partners is headquartered in New York (www.kpsfund.com).
“The Fargo acquisition allows ECI to expand its customer base to include key specialty-industrial OEMs and cross sell products into new geographies,” said David Webster, Chief Executive Officer of ECI. “Furthermore, we believe that by sharing best practices between ECI and Fargo, we can materially enhance our overall manufacturing operations by leveraging our joint culture of manufacturing excellence and continuous improvement. ECI intends to invest significant additional capital and resources into Fargo to ensure total customer satisfaction.”
Financing for the transaction will be provided by a syndicate of banks and institutional investors with BofA Merrill Lynch acting as lead arranger.
© 2017 Private Equity Professional | January 19, 2017
