Vance Street Capital has acquired R.S.T. Instruments from Hammond, Kennedy, Whitney & Company (HKW). Co-investing in the equity with Vance Street were Lexington Partners and Neuberger Berman Private Equity.
R.S.T. Instruments (RST), acquired by HKW in July 2014, designs and manufactures geotechnical instrumentation and data systems that are used to measure the structural integrity of bridges, hydroelectric dams, mines, railroads, airports, tailings dams, tunnels and highways. RST’s products are used to monitor, measure, log and transmit readings of geotechnical properties such as inclination, pressure, displacement and temperature so that customers can manage risks, increase productivity and reduce costs. RST, led by CEO Bruce Ripley, was founded in 1977 and is headquartered near Vancouver in Maple Ridge, BC (www.rstinstruments.com).
As part of the transaction, the RST management team will retain a material ownership stake in the business. “We look forward to partnering with Vance Street to further expand our global presence and continue to enhance the breadth of product solutions we provide to our customers,” said Mr. Ripley. “Vance Street’s experience building precision manufacturing businesses through organic product innovation and sales channel management as well as strategic add-on acquisitions aligns well with our long-term growth objectives.”
“RST Instruments encompasses all of the traits we look for in highly-engineered manufacturing businesses,” said Brian Martin, Partner at Vance Street Capital. “RST is a best in class provider in a fragmented niche market, it has a strong management team with a proven track record of consistent growth and product innovation, and is well positioned in an industry with strong tailwinds. We are excited to partner with RST’s excellent management team and to further the business’ position as the premier global provider of geotechnical instrumentation through organic growth and acquisitions.”
Vance Street makes control investments in companies with enterprise values of $30 million to $200 million and EBITDA of $5 million to $20 million. Sectors of interest include aerospace, defense, industrial, and medical. The firm is based in Los Angeles (www.vancestreetcapital.com).
This acquisition of RST is the third platform investment for Vance Street’s second fund. In February 2016 the firm acquired A&E Medical Corporation, a medical device manufacturing company based south of New York in Farmingdale, NJ (www.aemedical.com); and in September 2016 the firm acquired Motion Dynamics, a maker of components used in the medical device, industrial and aerospace markets (www.motiondc.com).
Lexington Partners is an alternative investment manager primarily involved in providing liquidity to owners of private equity and other alternative investments and in making co-investments alongside private equity sponsors. The firm employs more than 90 people and has offices in New York, Boston, Menlo Park, London, and Hong Kong (www.lexingtonpartners.com).
Neuberger Berman, founded in 1939, is a private, independent, employee-owned investment manager. The firm manages equities, fixed income, private equity and hedge fund portfolios for institutions and advisors worldwide. Neuberger Berman managed $271 billion in client assets as of June 30, 2017. The firm has offices in 30 cities worldwide and is headquartered in New York (www.nb.com).
Hammond, Kennedy, Whitney & Company invests in companies with revenues between $20 million and $200 million and EBITDAs between $2 million and $20 million. Since 1982, HKW has completed 53 platform management buyouts of small middle-market companies throughout North America as well as 61 add-on acquisitions. The firm was founded in 1903 and is headquartered in Indianapolis with an additional office in New York (www.hkwinc.com).
Debt financing for the transaction was provided by BMO Capital Markets. Quarton International was the financial advisors to RST.
© 2017 Private Equity Professional | September 8, 2017
