Genstar Capital has sold Tecomet, a manufacturer of components for the medical device and aerospace & defense markets, to Charlesbank Capital Partners. As part of this transaction, Genstar is maintaining a minority equity interest in the company.
Tecomet manufactures a range of products used in the medical and aerospace & defense industries. Its products include orthopedic implants, surgical instruments, trauma plates and photochemical etched products for medical device customers. For the aerospace & defense industry, the company manufactures components used in missile and satellite propulsion systems, commercial aviation, vision systems, and infrared applications. Tecomet operates sixteen manufacturing facilities in five countries around the world and employs over 2,500 people. The company, led by CEO Mark Kemp, was founded in 1964 and is based in Wilmington, MA (www.tecomet.com).
This is the second time that Charlesbank has invested in Tecomet. In 2008, Charlesbank acquired Tecomet from Cardinal Health and later sold the company to Genstar in December 2013. “Our first investment in Tecomet was very successful, and we are even more excited about the business today,” said Brandon White, Managing Director at Charlesbank. “Tecomet continues to have strong customer relationships, differentiated capabilities, and attractive demographic tailwinds. The business should not only benefit from continued growth in outsourcing penetration, but also have significant opportunities to further consolidate the industry. We believe these strengths make Tecomet a very compelling investment.”
During its slightly more than three-year term of ownership, Genstar completed three add-on acquisitions for Tecomet: in October 2016 it acquired Mountainside Medical, a Boulder, CO-based supplier of medical device components and instruments used in minimally invasive surgical devices; in December 2014, it acquired the OEM Solutions business of Symmetry Medical. OEM Solutions, based in Warsaw, IN, manufactures surgical instruments, orthopedic implants, and plastic and metal sterilization cases and trays; and in August 2014 it acquired 3D Medical Manufacturing, a manufacturer of medical device components, implants, instruments, cutting tools and mechanical/electro-mechanical assemblies based in Riviera Beach, FL.
Through the three add-on acquisitions and through organic growth the company more than quadrupled in size under Genstar. “We are very pleased with Tecomet’s development, which was achieved via strong organic growth as we broadened and diversified the company’s capabilities to strengthen its value proposition in existing sectors of the medical and aerospace markets, in addition to expanding into new high-growth sectors,” said Rob Rutledge, a Managing Director of Genstar.
Both Charlesbank and Tecomet see significant opportunity to continue the growth strategy that they began in 2008.
Genstar, which close its eighth fund with $3.95 billion in commitments in March 2017, invests from $50 million to $400 million in middle-market companies that have enterprise values from $50 million to $1 billion and EBITDAs greater than $15 million. The firm targets investments in the financial services, software, industrial technology, and healthcare industries. Genstar was founded in 1988 and is based in San Francisco (www.gencap.com).
Charlesbank Capital Partners invests in management-led buyouts and growth capital financings in companies with enterprise values of $150 million to $1.5 billion. The firm has offices in Boston and New York (www.charlesbank.com).
Charlesbank was advised both by Jefferies Group and Robert W. Baird. William Blair & Company advised Tecomet.
© 2017 Private Equity Professional | May 15, 2017
