Rotating Machinery Services (RMS), a portfolio company of Incline Equity Partners, has acquired AC Compressor and CONMEC Engineered Compressors (together ACC) from Baker Hughes, a subsidiary of General Electric.
The acquisition of ACC includes the personnel, intellectual property and tooling of AC Compressor as well as the drawings and designs of CONMEC’s centrifugal and axial compressors.
ACC services and repairs industrial compressors in the refining & petrochemical, industrial, onshore/offshore production and pipeline & gas processing industries. The company’s product line consists of axial, centrifugal and oil-free-screw compressors, with a worldwide installed base of over 1,200 machines. AC Compressor’s history began in 1931 when it was part of Allis-Chalmers. AC Compressor acquired CONMEC in 1997 and in 2001, General Electric acquired both businesses from Dover Corporation.
RMS is an aftermarket turbomachinery services company, providing repair and remanufacturing of industrial rotating machinery and equipment, including compressors, gas and steam turbines, and expanders used in the oil and gas refining, steel, chemicals, and natural gas transmission sectors. The company, led by CEO John Bartos, has facilities in Bethlehem, PA (headquarters), Houston, TX and Appleton, WI (www.rotatingmachinery.com).
RMS currently has 132 employees and the ACC acquisition adds an additional 32 employees to its corporate headcount. “This acquisition empowers us with the expert personnel, intellectual property, associated tooling of the AC Compressor products and the drawings for the CONMEC centrifugal and axial compressor offerings,” said Mr. Bartos. “Acquiring these fundamentals gives RMS the unique ability to act as an OEM while maintaining its sole focus on aftermarket work. The ACC and CONMEC service offerings are extremely important to RMS, and we are proud to be the leading provider in the market.”
RMS has been a portfolio company of Incline since October 2015. “We are proud to have helped RMS more than triple the size of the company since our initial investment,” said Justin Bertram, Partner with Incline. “This transaction marks our second acquisition together, and it strategically positions RMS for the next phase of growth. We will be laser-focused on the integration and ensuring a smooth transition for the ACC customer base.” The first add-on acquisition for RMS was the May 2017 acquisition of Houston-based Mepco, a provider of repair services for rotating equipment including turbines, compressors, pumps, and centrifuges.
Incline Equity Partners invests from $15 million to $30 million in support of recapitalizations, buyouts and corporate divestitures of lower middle market companies that have EBITDAs greater than $5 million and enterprise values between $50 million and $300 million. Sectors of interest include value-added distribution, specialized light manufacturing, and business and industrial services. Incline was formed in 2011 and is based in Pittsburgh (www.inclineequity.com).
TwinBrook Capital Partners was the sole lead arranger and administrative agent for the financing that supported the buy of ACC by RMS. TwinBrook focuses on loans to private equity-owned companies with EBITDA between $3 million and $50 million, with an emphasis on companies with $25 million of EBITDA and below. The firm targets senior financing opportunities up to $200 million with hold sizes across the Twin Brook platform ranging from $25 million up to $100 million (www.twincp.com).
© 2018 Private Equity Professional | May 10, 2018