Genstar Capital has acquired Ohio Transmission Corporation, a distributor of industrial automation equipment, from Irving Place Capital.
Ohio Transmission Corporation (OTC) is a distributor of highly engineered products including motion control, pumps, finishing products, robotics, motors and air compressors. The company has more than 13,000 customers that are active in the transportation, industrial machinery, metals, chemicals, food & beverage, and other markets.
OTC also provides technical sales consultation and aftermarket repair and services. The company was co-founded in 1963 by David Derrow and Phil Carstens and today is led by CEO Philip Derrow. OTC has approximately 900 employees at 38 branch locations in 17 South, Midwest and Northeast states with a headquarters in Columbus, OH (www.otpnet.com).
Irving Place Capital (IPC) acquired OTC from Frontenac in September 2015. “The IPC team, which includes seasoned industry executives and operating resources, has actively supported our organic and acquisition growth strategies while helping to reinforce the foundations of the business,” said Mr. Derrow. “Together, we have expanded our geographic footprint, entered new end-markets, broadened our product offering, and accelerated our technical service and repair capabilities.”
“We have enjoyed a terrific partnership with the management team at OTC,” said Devraj Roy, a partner at IPC. “During the course of our involvement, we have invested in sales and engineering talent, completed ten add-on acquisitions, and supported impactful operational initiatives. We wish the company continued success going forward.”
IPC is a mid-market private equity firm that invests from $50 million to $250 million of equity in North American-based companies that are active in the industrial, packaging, consumer and retail industries and have more than $7 million of EBITDA. Investment types include buyouts, recapitalizations, growth capital financings, corporate divestitures, build-ups, and public-to-private transactions. The firm was founded in 1997 and is headquartered in New York (www.irvingplacecapital.com).
“OTC operates at a pivotal point in the manufacturing sector, benefiting suppliers looking to partner with distributors with broader product and service capabilities and customers who are increasingly relying on distributors with strong technical resources,” said Rob Rutledge, a managing director at Genstar. “The company provides a leading brand portfolio of highly technical products, value-added services and specialized solutions with a proven track record of adding new product categories. We look forward to supporting management’s strategy of product and geographic expansion organically as well as through strategic acquisitions to better serve OTC’s customers.”
Genstar invests from $50 million to $400 million in middle-market companies that have enterprise values from $50 million to $1 billion and EBITDAs greater than $15 million. The firm targets investments in the financial services, software, industrial technology, and healthcare industries. In February 2019, Genstar held a final closing of Genstar Capital Partners IX LP with $5.9 billion in capital commitments.
Genstar, founded in 1988, has 21 members on its investment team and operates from a single office in San Francisco. The investment team is complemented by a group of 26 strategic advisors, who are current and former operating executives (www.gencap.com).
Baird (www.rwbaird.com) was the financial advisor to OTC and Jones Day (www.jonesday.com) served as the company’s legal counsel. Weil, Gotshal & Manges (www.weil.com) provided legal services to Genstar Capital.
© 2019 Private Equity Professional | April 10, 2019