Stellex Closes Buy of Paragon Metals

Stellex Capital Management has acquired Paragon Metals, a maker of machined components used in the automotive, heavy truck and general industrial markets.

Paragon Metals is a manufacturer of iron, aluminum, steel, and other light metal machined components and assemblies. The company’s products are used in transmissions, drivelines, engines, chassis and other industrial applications. Paragon’s capabilities include engineering and design, prototyping, casting, forging, machining and assembly. The company is headquartered in Hillsdale, MI (www.paragonmetals.com).

With the buy of Paragon completed, Stellex has named Bruce Swift, an executive with more than 30 years of senior management experience in the automotive industry, as Paragon’s new chief executive officer. Stellex partnered with Mr. Swift in October 2017 to seek investments in the niche manufacturing sector.

Mr. Swift was most recently chief executive officer of Diversified Machine, a supplier of chassis and powertrain components to automotive OEMs and Tier 1 suppliers. Prior to Diversified Machine, he was the president of the Metaldyne Driveline division of Metaldyne Performance Group. Mr. Swift has also held executive positions at Ford Motor Company and Honda of America.

Stellex and Mr. Swift have a history of working together to buy, build and operate automotive suppliers. Stellex founders Ray Whiteman and Mike Stewart worked with Mr. Swift when he was the CEO of Diversified Machine, a portfolio company of the Carlyle Group from 2005 to 2011. “We are thrilled to partner with Bruce Swift again through this transaction,” said Mr. Stewart. “Together with David Smith, Paragon’s vice president of sales, this partnership will enable Paragon to leverage its current customer base and achieve multiple growth opportunities. We intend to invest a significant amount of capital in Paragon to expand the business both organically and through acquisitions in the automotive supplier industry.”

Stellex invests from $25 million to $100 million in United States or Europe-based companies with enterprise values from $50 million to $500 million. Sectors of interest include automotive, aerospace, building products, defense, industrial equipment, metal fabrication and transportation.

“We are tremendously excited about the acquisition of Paragon,” said David Waxman, a managing director at Stellex. “Paragon is a leader in the automotive machining space and one of the few companies capable of producing large volumes of precision parts, with challenging engineering and design and build timelines.”

Stellex has offices in New York and London (www.stellexcapital.com).

© 2019 Private Equity Professional | February 4, 2019

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