Archives for February 15, 2019

Mason Wells Sells Aquion to Pentair

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Mason Wells has sold Aquion, a water treatment equipment company, to publicly-traded Pentair for $160 million in cash. Mason Wells acquired Aquion through its third fund in December 2013 from Ares Capital.

Aquion, with annual revenues of approximately $72 million, is a manufacturer of water treatment equipment and water quality products including water conditioners and softeners, carbon filters and filtration systems, reverse osmosis systems, and ozone and ultraviolet disinfection systems. The company’s products are used in both the residential and commercial water treatment industry.

Aquion’s residential brands include RainSoft and Erie Water Treatment, and its commercial brands include OptiPure and ClearWater Tech. Aquion was founded in 1953 and has approximately 170 employees across three facilities located in Illinois, California and Belgium. The company, led by CEO Michael Madsen, is headquartered near Chicago in Roselle, IL (www.aquion.com).

“Aquion is a tremendous company led by one of the industry’s best management teams,” said Tom Smith, executive managing director of Mason Wells.  “During our ownership of the company over the past five years, Aquion has established itself as a leader through sales channel and geographic expansion, product innovation, and operational excellence.  We have been fortunate to partner with such a passionate and talented management team who has the business poised for continued success well into the future.”

Mason Wells makes investments in Midwest-based companies with revenues of $25 million to $300 million and EBITDAs of $5 million to $30 million. Sectors of interest include consumer packaged goods; packaging materials and converting; outsourced business services; and engineered products and services.  In February 2016, Mason Wells held a final closing of Mason Wells Buyout Fund IV and its related Executive Buyout Fund IV with total commitments of $615 million.  The firm was founded in 1998 and is based in Milwaukee (www.masonwells.com).

Pentair (NYSE: PTR) designs, manufactures, and services water treatment equipment and products with annual revenues of approximately $2.8 billion. The company has 130 locations in 34 countries and 10,000 employees and is headquartered in the Minneapolis suburb of Arden Hills, MN (www.pentair.com).

Robert W. Baird (www.rwbaird.com) was the financial advisor to Aquion.

© 2019 Private Equity Professional | February 15, 2019

Incline Closes Fifth Battery Add-On

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Continental Batteries, a portfolio company of Incline Equity Partners, has acquired Battery Distributors (BDI). Continental Batteries is one of the largest independent battery distributors in the United States.

BDI is a distributor of automotive batteries, commercial batteries, marine and RV deep cycle batteries as well as uninterruptible power supply (UPS) products, chargers, testers and other specialty products. The company was founded in 1984 and is headquartered near Atlanta in Forest Park, GA (www.batterydistributorsinc.com).

Continental’s aftermarket batteries are distributed to the automotive, commercial, golf, marine and industrial markets. The company provides on-premise delivery to customers in major cities, as well as to those in regional and rural areas through its multi-location branch network with facilities in Texas, New Mexico, Oklahoma, Kansas, Missouri, Illinois, Iowa and Nebraska. Continental was founded by Ralph McCann in 1932 and is headquartered in Dallas (www.continentalbattery.com).

“Expansion into the Atlanta market was a priority for us.  It is important to add branch locations in metropolitan cities given our high-touch delivery and collection model,” said Eric Royse, CEO of Continental.

Incline partnered with the senior management team of Continental to acquire the business from family ownership in December 2017. The buy of BDI is the fifth add-on acquisition since Incline’s original investment.  The four earlier acquisitions were Wholesale Battery (Baton Rouge, LA), Standard Battery (Kansas City, MO), Carolina Energy (Ft. Mill, SC) and Battery Distributors SE (Jacksonville, FL).

“We are keenly focused on growth through the continued consolidation of the highly fragmented aftermarket battery industry,” said John Morley, a managing director of Incline. “We plan to partner with other companies like BDI that complement Continental’s product offering and/or expand its geographic reach.”

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 $25 million and $300 million. Sectors of interest include value-added distribution, specialized light manufacturing, and business services.  Incline was formed in 2011 and is based in Pittsburgh (www.inclineequity.com).

© 2019 Private Equity Professional | February 15, 2019

LFM Keeps Building Eckhart

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Eckhart, a portfolio company of LFM Capital, has acquired Gasper Engineering. This is the sixth add-on acquisition for Eckhart since being acquired by LFM in June 2015.

Gasper Engineering designs, builds, and integrates automated assembly, conveyance, labeling, and sortation systems for companies that are active in the aerospace, automotive, life science, packaging, and power generation & distribution sectors. Gasper’s customers include Cummins, Honeywell, Schneider Electric, Aisin, GECOM, FOX, and Grote. The company was founded in 1999 by Stephen Gasper and is based in North Vernon, IN (www.gasperengineering.com).

“Gasper Engineering is proud of the strong reputation we’ve earned integrating highly engineered automation into the most technologically advanced industrial environments in the world,” said Mr. Gasper. “As an Industry 4.0 leader, Eckhart’s advanced technologies complement our core business and their turn-key suite of solutions bring real value to our customers.”

Industry 4.0 refers to the current trend of automation and data exchange in manufacturing technologies. The goal of Industry 4.0 is the creation of “smart factories” that utilize cyber-physical systems, the Internet of things, cloud computing and cognitive computing. Industry 4.0 is commonly referred to as the fourth industrial revolution.

Eckhart is a designer and manufacturer of autonomous guided vehicles; industrial robotic systems; manufacturing tool development and production; and ergonomic general assembly tooling products. The company’s customers include Honda, Toyota, Nestle, CertainTeed, General Electric, FedEx, Procter & Gamble, Kroger, and Allison Transmission. Eckhart is led by CEO Andy Storm and is headquartered near Detroit in Warren, MI (www.eckhartusa.com).

“As global markets continue to experience volatility and change, establishing a local presence close to customers will remain a high priority for Eckhart,” said Mr. Storm. “Gasper Engineering will help us accelerate the adoption of Industry 4.0 in a key region of the United States where long-term growth opportunities in non-cyclical industries are significant.”

In January 2019, Eckhart closed its fifth add-on acquisition with the buy PRI Robotics & Automation, a robotic systems integrator. PRI designs, builds, and integrates robotic systems for applications that include machine tending, assembly, dispensing, material removal, arc welding, and quality inspection. The company’s customers are active in the agriculture, refrigerated transportation, medical device, automotive, and outdoor/recreational industries and include Honeywell, Medtronic, Federal Mogul, Case New Holland, ThermoKing, Toro, Horton, Bobalee, and Post Consumer Brands. PRI was founded in 1995 and is based near Minneapolis in Plymouth, MN (www.prirobotics.com).

LFM invests in US-based manufacturing and industrial services companies with at least $3 million of EBITDA and enterprise values from $15 million to $125 million. In October 2018, LFM closed its second fund, LFM Capital Partners II LP, with $184 million in capital commitments. The firm’s earlier fund closed in October 2014 with $110 million of capital commitments. LFM was formed in May 2014 by Steve Cook, Rick Reisner, and Dan Shockley and is headquartered in Nashville (www.lfmcapital.com).

© 2019 Private Equity Professional | February 15, 2019

Corridor Adds Investment Pro

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Corridor Capital had hired Zack Stiefler as a principal on the firm’s investment team. Mr. Stiefler will be active in the evaluation, due diligence, financing and execution of new investment opportunities. In addition, he will also work with Corridor’s portfolio companies.

Mr. Stiefler joins Corridor after four years at New York-based private equity firm Lindsay Goldberg where he was a vice president. He has closed and managed investments across a range of sectors including industrial, healthcare, real estate, consumer, and energy.

From 2014 to 2018 he was the co-founder and CEO of Philadelphia-based Bungalow Insurance, an online seller of property and casualty insurance products, specifically renters insurance. Bungalow Insurance was sold to Latham, NY-based Effective Coverage, an online seller of insurance products, in 2018.

Mr. Stiefler has an MBA from Wharton and a BS in Economics and a BA in Political Science from Duke University.

Corridor Capital makes control investments in mid-market companies with EBITDAs of $2 million to $8 million. The firm invests across many sectors but has specific interest in specialty manufacturing, business services, and value-added distribution. Corridor Capital is based in Los Angeles (www.corridorcap.com).

© 2019 Private Equity Professional | February 15, 2019