Mill Point Takes Pioneer Transformers

Pioneer Power Solutions has agreed to sell its power transformer divisions (Pioneer Transformers) to Mill Point Capital for $60.5 million in cash and a $5 million seller’s note.

Pioneer Transformers engineers, designs and assembles specialty electrical transformers for utility, industrial, commercial, renewable energy and data center market applications. The company provides both liquid-filled and dry-type transformer products through its US, Canada and Mexico operations. The acquired business includes the assets of Pioneer Transformers and Pioneer Dry Type Transformer Group, which includes Jefferson Electric, Bemag Transformer, and Harmonics Limited (www.pioneertransformers.com) (www.pioneerdrytypegroup.com) (www.jeffersonelectric.com) (www.bemag.ca) (www.harmonicslimited.com).

“Pioneer Transformers is led by an excellent team that has earned a reputation for quality products, superior engineering capabilities and excellent levels of customer service. With strong brand equity, a history of operational excellence and the ability to now focus exclusively on its core transformer operations, the company is well-positioned to seize compelling growth opportunities,” said Antony Besso, an executive partner of Mill Point will serve as chairman of the company.

“The North American power grid requires significant investment in both new capacity and replacement units to keep pace with ever-increasing electrical demand,” said Dustin Smith, a partner at Mill Point. “Given Pioneer’s strong market position and reputation for providing reliable custom-engineered power transformer solutions, we are confident that the company will capitalize on these favorable industry tailwinds as a standalone entity.”

Mill Point makes control-oriented investments of $15 million to $80 million in middle-market companies that have enterprise values of $50 million to $250 million. Sectors of interest include business services and industrial. Mill Point Capital closed its inaugural institutional fund, Mill Point Capital Partners LP, at its hard cap of $450 million in May 2018. The firm was founded by Managing Partner Michael Duran and is based in New York (www.millpoint.com).

Pioneer Power Solutions (NASDAQ: PPSI) manufactures and services a range of specialty electrical transmission, distribution and on-site power generation equipment for applications in the utility, industrial, commercial and backup power markets. The company is headquartered in Fort Lee, NJ (www.pioneerpowersolutions.com).

Lincoln International was the financial advisor to Pioneer Power Solutions.

© 2019 Private Equity Professional | July 1, 2019

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