Cortec Group has acquired Rotating Machinery Services (RMS) from Incline Equity Partners.
RMS is a provider of specialty aftermarket repair, maintenance and overhaul services for large, highly engineered rotating machinery including centrifugal compressors, axial air compressors, oil-free screw compressors, expanders and steam turbines. The company has approximately 200 employees, four primary operating locations, and a staff that travels globally to serve RMS’s base of over 500 customers.
RMS, led by CEO John Bartos, was founded in 1998 and is headquartered in Bethlehem, PA with an additional repair and service center in Houston, TX (www.rotatingmachinery.com).
Incline first invested in RMS in October 2015. “When we initially partnered with RMS, it was a durable business with tremendous potential but was underinvested in and operating without a growth mandate,” said Justin Bertram, a senior partner with Incline. “We focused our efforts on developing the infrastructure needed to enhance operations and recruiting a talented management team with a growth vision. Those efforts paid off, and in just three and half years, we more than tripled the size of the business. We’re very proud to have helped transform the company from a single facility to a global provider with five locations across two continents.”
During its ownership term, Incline closed two add-on acquisitions for RMS including the May 2018 buy of AC Compressor and CONMEC Engineered Compressors (together ACC) from Baker Hughes, a subsidiary of General Electric. ACC services and repairs industrial compressors in the refining & petrochemical, industrial, onshore/offshore production and pipeline & gas processing industries; and the May 2017 buy of Houston-based Mepco, a provider of repair services for turbines and compressors.
“Incline was instrumental in RMS completing two very strategic, sizeable acquisitions,” said Mr. Bartos. “Their deep experience completing acquisitions allowed us to better analyze the investments initially and significantly improved our ability to achieve a smooth integration and seamless transition for customers.”
The buy of RMS is the seventh platform investment for Cortec Group Fund VI LP which closed in May 2015 with $1.1 billion in capital commitments. “Cortec is an ideal partner for RMS given its track record of successfully investing in high growth specialty services businesses,” added Mr. Bartos. “During the transaction process, Cortec demonstrated that it understood our business model, embraced our culture and brought relevant experience to the table. They did everything they said they would and closed the transaction on schedule and as promised.”
Cortec invests in companies with revenues of $40 million to $300 million and EBITDA of $7 million to $35 million. Sectors of interest include healthcare products and services, business and consumer products, value-added distribution and specialty services. The firm was founded in 1984 and is based in New York (www.cortecgroup.com).
“We are excited to support John Bartos and the RMS management team as they continue to grow their business and market presence globally through both organic and acquisition initiatives,” said Scott Schafler, a managing partner at Cortec.
Senior debt to support the acquisition was provided by Twin Brook Capital Partners and Antares Capital.
Piper Jaffray & Co. and Lincoln International were the financial advisors to RMS.
© 2019 Private Equity Professional | June 20, 2019
