Archives for November 28, 2018

SFW Sells Spectro to AMETEK

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SFW Capital Partners has sold Spectro Scientific to publicly-traded AMETEK for approximately $190 million. SFW acquired Spectro from QinetiQ Group for $20.5 million in July 2011.

Spectro Scientific is a provider of systems used to monitor the condition of assets using on-site analysis of in-use oil, lubricants and other industrial fluids. The company’s systems include instrumentation, consumables, proprietary algorithms and cloud-based software analytics that enable real-time decision making resulting in increased asset availability, better reliability, reduced operating expenses and improved productivity.

Spectro is one of the largest global suppliers of oil and industrial fluid analysis instruments and has a large, installed blue-chip customer base in diversified end markets including process industrials, fleet and transportation and power generation. The company, with annual sales of approximately $50 million, is headquartered northwest of Boston in Chelmsford, MA (www.spectrosci.com).

During SFW’s ownership term, the company pursued a number of growth initiatives, including a substantial increase in new product development investments and the completion of four add-on acquisitions.

“We are incredibly proud of the transformational growth we experienced at Spectro in partnership with SFW Capital,” said Brian Mitchell, Spectro’s CEO. “SFW’s unique sector-focused experience and business building expertise proved to be incredibly valuable to Spectro as we made substantial investments to pursue our strategy. SFW’s support and the resources they provided allowed us to develop a truly unique position in the market for predictive analytics for maintenance, enabling us to serve our customers more effectively and create significant opportunities for our employees and business partners.”

“Spectro’s compelling value proposition, proprietary application knowledge and significant opportunities for growth were a great fit with SFW’s focus on investing in and supporting the growth and development of providers of analytical instrumentation, control and monitoring solutions, consumables, and software,” said Ahmad Sheikh, a Partner at SFW. “We are very pleased to have had the opportunity to partner closely with the management team at Spectro to build and transform the business.”

SFW Capital Partners focuses exclusively on analytical tools and services companies, including providers of instrumentation, software, information and analytical services. SFW typically invests from $10 million to $75 million of equity in middle market companies that have up to $25 million in EBITDA. The firm is headquartered in Rye, NY (www.sfwcap.com).

AMETEK (NYSE: AME), the buyer of Spectro, is a global manufacturer of electronic instruments and electromechanical devices with annual revenues of more than $4 billion. The company is headquartered in Berwyn, PA (www.ametek.com).

© 2018 Private Equity Professional | November 28, 2018

Pfingsten Invests in South-Tek Systems

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Pfingsten Partners has acquired South-Tek Systems, a manufacturer of nitrogen generators, in partnership with its founders, Tim and Lisa Bodemann, and management.

South-Tek’s nitrogen generators are used in a range of commercial and industrial end markets including automotive, beverage and food, chemical, mining, electronics, laboratory, laser cutting, medical packaging, oil and gas, plastics and pharmaceutical.

Nitrogen gas can be purchased and stored through the use of nitrogen cylinders, however, this is an expensive option and operations can be halted in the event that cylinder supply or delivery is interrupted. In contrast, nitrogen generators create nitrogen gas on site (air is 78% nitrogen) resulting in an unlimited supply of on-demand nitrogen gas. Many nitrogen generators, including those made by South-Tek, utilize pressure swing adsorption or membrane technology to separates the nitrogen molecules from the oxygen molecules in the air resulting in high purity nitrogen gas (up to 99.9995% pure).

South-Tek’s nitrogen generators are sold through distributors, sales representatives, contractors and direct to end-users. The company was founded in 1997 and is headquartered in Wilmington, NC (www.southteksystems.com).

“The South-Tek management team built its business by developing high-quality, complex nitrogen generation solutions for their customers,” said Scott Finegan, a Pfingsten Managing Director.  “We look forward to supporting South-Tek’s continued growth through investments in people, facilities, new products and strategic add-on acquisitions.”

“We found the ideal partner for our business,” said Scott Bodemann, South-Tek’s President.  “Pfingsten’s operational approach to creating value combined with a conservative balance sheet will allow South-Tek to rapidly invest in new product and market applications which will position the company for sustained growth.”

Pfingsten invests in middle-market manufacturing, distribution and business services companies that have transaction values ranging from $15 million to $100 million, revenues from $20 million to $150 million, and EBITDA between $3 million and $12 million. Since completing its first investment in 1991, Pfingsten has acquired 131 such companies through five funds with total commitments of $1.3 billion. The firm is based in Chicago with representative offices in India and China (www.pfingsten.com).

The buy of South-Tek is Pfingsten’s seventh platform investment by its $382 million fifth fund which closed in February 2016.

© 2018 Private Equity Professional | November 28, 2018

MSCP Adds to PPC Flexible

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PPC Flexible Packaging, a portfolio company of Morgan Stanley Capital Partners, has acquired Temkin International.

Temkin is a provider of packaging products including rollstock, stand-up pouches and floral sleeves to companies that are active in the food, produce, floral, and stationary and craft markets.

The company was founded in 1980 by Danny Temkin and operates manufacturing facilities in Payson, UT (headquarters) and Bogota, Colombia with additional offices in Miami and Toronto (www.temkininternational.com).

PPC Flexible is a flexographic printer and converter of flexible films, bags and pouches that are used in the retail food and healthcare markets. The company is headquartered near Chicago in Buffalo Grove, IL with additional manufacturing facilities in Mission, KS, and Rome, GA (www.ppcflex.com).

In February 2017, Morgan Stanley Capital Partners acquired Fisher Container, a maker of flexible plastic pouches, bags and films, in partnership with plastics and packaging executive Kevin Keneally and the Fisher management team. In May 2017, Fisher Container completed its first add-on with the buy of Mission, KS-based Packaging Products Corporation (PPC). The combined Fisher Container and PPC operations were rebranded as PPC Flexible Packaging in February 2018.

“We are thrilled to have the outstanding team at Temkin International join the PPC family. Danny Temkin and Lynn Abplanalp have assembled a world-class manufacturing, pre-press and graphics operation recognized industry-wide for its innovation, service and quality. Having a west coast and South American presence expands our geographic footprint and provides us deeper capabilities in stand up pouch, plate making and flexographic printing,” said Kevin Keneally, CEO of PPC Flexible.

“We believe Temkin is an excellent complement to PPC, enhancing the product offering to the market while embodying the same service-focus culture as PPC,” said Eric Kanter, Managing Director of Morgan Stanley Capital Partners. “We congratulate Mr. Temkin on his tremendous success, and we’re thrilled to partner with Lynn Abplanalp and the rest of the Temkin employees.”

Morgan Stanley Capital Partners is the middle-market focused private equity business of Morgan Stanley Investment Management which in turn is part Morgan Stanley (NYSE: MS), a financial services firm providing investment banking, securities, wealth management and investment management services (www.morganstanley.com).

© 2018 Private Equity Professional | November 28, 2018

Thompson Street Acquires Palisade

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Thompson Street Capital Partners has acquired Palisade Corporation in partnership with the company’s management team.

Palisade is a provider of analysis software, under the @RISK and the DecisionTools Suite brands, which enable Microsoft Excel and other software platforms to perform risk modeling and decision analysis. Palisade’s customers, which include 93 companies in the Fortune 100, are active in a wide range of industries including finance, oil and mineral exploration, real estate, heavy manufacturing, pharmaceuticals, and aerospace.

Palisade, led by CEO Randy Heffernan, was founded in 1984 and is headquartered in Ithaca, NY (www.palisade.com).

“Partnering with Thompson Street will enable Palisade to put our growth strategy into high gear,” said Mr. Heffernan. “By leveraging Thompson Street’s track record of accelerating other technology sector leaders like Palisade, we expect to drive innovation and growth within the risk analytics space for years to come.”

“For more than thirty years, Palisade has developed market-leading risk analysis software that enables mission-critical decision making at many of the world’s largest and most complex organizations,” said Craig Albrecht, a Managing Director at Thompson Street. “We are excited to partner with Palisade’s outstanding leadership team to expand into new markets, reach new users and create new value for our customers.”

Thompson Street invests from$25 million to $150 million in companies with EBITDA between $5 million and $20 million. Sectors of interest include healthcare and life science services, software and technology services, business services, and engineered products. Since its founding in 2000, Thompson Street has acquired more than 100 companies. The firm is headquartered in St. Louis (www.tscp.com).

In July 2018, Thompson Street held a final closing of its fifth fund, Thompson Street Capital Partners V LP, at the hard cap of $1.15 billion. The new fund was oversubscribed and exceeded its original $850 million target. The firm’s earlier fund closed with $640 million of capital commitments in December 2015.

Lincoln International (www.lincolninternational.com) was the financial advisor to Palisade on this transaction.

© 2018 Private Equity Professional | November 28, 2018