Archives for September 26, 2019

GTCR Returns to Cole-Parmer

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Golden Gate Capital has agreed to sell Cole-Parmer Instrument Company, a designer, manufacturer, and distributor of specialty lab equipment, to GTCR. Golden Gate and the company’s management will retain a minority stake in the business.

Cole-Parmer is a supplier of more than 150,000 SKUs of laboratory and industrial fluid handling products, instrumentation, equipment, and supplies that are used in the life sciences, healthcare, environmental, and industrial markets. The company’s products are sold via catalogs, phone, fax, a suite of eCommerce sites and through a network of international dealers. Company-owned brand names include Masterflex, Environmental Express and Traceable.

Cole-Parmer was founded in 1955 by Jerome Cole and John Parmer and was acquired by Thermo Fisher in 2001. GTCR carved Cole-Parmer out of Thermo Fisher in August 2014 to create a standalone company and then sold the business to Golden Gate in March 2017. Today, the company is led by CEO Bernd Brust with a headquarters near Chicago in Vernon Hills, IL (www.coleparmer.com).

“Bernd and the entire Cole-Parmer team have done an exceptional job transforming the business since the carve-out from Thermo Fisher. They have a track record of success and we are excited to once again partner with them to invest in the long-term growth of the company,” said Dean Mihas, a managing director at GTCR.

Since GTCR’s sale of Cole-Parmer to Golden Gate in 2017, the company invested in its cloud-based technology infrastructure and closed several add-on acquisitions that expanded its product portfolio, global operations, and exposure to new and growing end-markets. Going forward, GTCR and Golden Gate intend to grow the business both organically and by continued add-on acquisitions in the fragmented life sciences and laboratory products sectors.

“We have enjoyed a very successful partnership with Bernd and the Cole-Parmer team over the last few years,” said Jim Rauh, a managing director at Golden Gate. “We are proud to have helped Cole-Parmer continue to develop into a premier life-sciences platform and become the acquirer of choice in a fragmented market. We look forward to supporting Cole-Parmer’s continued growth alongside the company’s management team and GTCR.”

“We are grateful to Jim Rauh and the Golden Gate Capital team for their collaboration and are very proud of the strategic and operational progress we have made,” said Mr. Brust. “Together, we have been able to execute on numerous growth initiatives, including a deepened focus on product innovation, establishing us at the forefront of our industry. We are delighted to be renewing our successful partnership with GTCR and look forward to working with both firms, who share our vision and commitment to continuing Cole-Parmer’s evolution into a diversified products company focused on the life sciences, healthcare and environmental end-markets.”

Golden Gate invests in companies across a range of industries and transaction types, including going-privates, corporate divestitures, recapitalizations, and public equity investments. Sectors of specific interest include software, semiconductors and IT hardware, consumer, industrials, IT and business services, and financial services. The firm has approximately $15 billion of capital under management and is based in San Francisco (www.goldengatecap.com).

Since its founding in 1980, GTCR has invested more than $15 billion in over 200 companies. Sectors of interest include business services; technology, media & telecommunications; healthcare, and financial services & technology. GTCR is based in Chicago (www.gtcr.com).

Jefferies was the financial advisor to Cole-Parmer and Baird was the financial advisor to Golden Gate Capital.

This transaction is expected to close during the fourth quarter of 2019.

© 2019 Private Equity Professional | September 26, 2019

CORE On Course Building Industry 4.0 Platform

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Midwest Composite Technologies, a portfolio company of CORE Industrial Partners, has acquired FATHOM, a manufacturer with an expertise in 3D printing and additive manufacturing.

FATHOM provides rapid prototyping and low- to high-volume production services of parts used in the consumer products, electronics, medical, automotive, aerospace, sporting goods and product design sectors.

In addition to its to 3D printing and additive manufacturing capabilities – which include fused deposition modeling, multi-jet fusion, polyjet printing, laser sintering and stereolithography – FATHOM also has expertise in urethane casting, CNC machining, tooling, injection molding, engineering and design support, model finishing, and assembly.

FATHOM, with annual revenues of more than $25 million, was founded in 2008 by Rich Stump and Michelle Mihevc. The company is growing by 30% to 40% per year and has made the Inc. 500|5000 list of the country’s fastest-growing companies every year since 2013. FATHOM is headquartered in Oakland, CA with a second facility in Seattle (www.studiofathom.com).

CORE acquired Midwest Composite Technologies (MCT) in September 2018. MCT is a provider of 3D prototyping and low-volume production services. The company’s technical capabilities include laser sintering, poly-jet printing, stereolithography, fused deposition modeling, multi-jet fusion technologies, CNC machining, injection molding and industrial design. Customers of MCT are active in the medical, aerospace, research & development, consumer and industrial end markets. The company, founded in 1984, has a 120,000 square foot operating facility and headquarters located west of Milwaukee in Hartland, WI (www.midwestcomposite.com).

“The acquisition of FATHOM brings together two of the leading additive manufacturing firms in North America,” said Ryan Martin, chief executive officer of MCT. “Both companies offer differentiated engineering expertise, exceptional customer service and a long-tenured track record of successfully partnering with leading companies across myriad end markets to provide the best in modern manufacturing, from prototype to production.”

According to CORE, the combination of MCT and FATHOM creates one of the largest global independent additive manufacturing companies with over 80 3D printing machines, wide capabilities in additive technologies, and over 150,000 square feet of manufacturing capacity across three facilities.

“The acquisition of FATHOM aligns well with our previously stated intention to build a leading Industry 4.0 additive manufacturing company,” said Matthew Puglisi, a partner at CORE. “From customer bases to technical expertise and additive manufacturing capabilities, MCT and FATHOM are highly synergistic, and we’re looking forward to further building out the platform through additional complementary acquisitions and continued organic growth.”

CORE makes control investments in companies that have revenues of up to $200 million, EBITDA of up to $20 million, and enterprise values up to $150 million. Sectors of interest include a range of specialty verticals within the manufacturing and industrial technology sectors. In February 2019, the firm held a final close of CORE Industrial Partners Fund I LP with total commitments of $230 million. The new fund was significantly oversubscribed with demand in excess of the initial target of $200 million and initial hard cap of $225 million. CORE was founded in 2017 and is headquartered in Chicago (www.coreipfund.com).

Stifel Global Technology Group was the financial advisor to FATHOM on this transaction. Winston & Strawn provided legal services to CORE and MCT.

© 2019 Private Equity Professional | September 26, 2019

IOP Keeps Building Union

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Union Corrugating Company, a portfolio company of Industrial Opportunity Partners, has acquired Oakland Metal Buildings.

Oakland is a manufacturer and distributor of pre-engineered metal buildings that are used in commercial, post-frame/agricultural, and other industrial applications. Oakland’s customer base consists primarily of contractors and the company operates out of a single facility in Florence, AL with over 130,000 sq. ft. of manufacturing capacity (www.oaklandmetal.com).

IOP purchased Union Corrugating in December 2016 and the buy of Oakland is the company’s second add-on acquisition. In November 2018, it acquired Reed’s Metals, a Brookhaven, MS-based manufacturer and distributor of and pre-engineered metal buildings. Reed’s has more than 240 employees and seven manufacturing facilities located in the southeast.

Union is a manufacturer of metal roofing systems, roofing components and pre-engineered metal buildings that are used in residential, post frame/agricultural and commercial applications and are sold through lumber retailers, home centers, wholesalers, contractors and directly to consumers. Union is based in Fayetteville, NC with seventeen additional manufacturing and distribution facilities located throughout the Southeast, Mid-Atlantic and Midwest. The company is led by CEO Keith Medick (www.unioncorrugating.com).

“The addition of Oakland significantly increases our manufacturing capacity for metal buildings and allows us to continue growing that business while also giving us a location in the Alabama market from which to sell Union’s metal roofing products,” said Mr. Medick.

“It is very exciting to have Oakland join Union Corrugating,” said Dave Mackin, an IOP operating principal. “We believe Oakland’s management team has built a great company and look forward to expanding the business across Union’s served geography.”

IOP focuses on acquiring middle-market manufacturing and value-added distribution businesses, typically with revenues between $30 million and $400 million. The firm targets businesses with strong product, customer, and market positions and provides both management and operational resources to support sales growth and operational improvements. IOP is headquartered in the Chicago suburb of Evanston (www.iopfund.com).

© 2019 Private Equity Professional | September 26, 2019

Natalya Michaels Joins MidOcean

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MidOcean Partners has hired Natalya Michaels as a managing director to focus on marketing, investor relations and business development activities across the firm’s private equity and credit businesses.

“Natalya brings a wide range of business development experience that we believe will help MidOcean expand its investor base and product offerings,” said Deborah Hodges, COO of MidOcean. “Her skill set and investor relationships complement those of our existing team and will help strengthen our marketing efforts.”

Ms. Michaels has more than two decades of experience in private equity. Most recently, she was a managing director at Artisan Partners, where she was the head of business development for Artisan’s thematic equity team, which pursues investments in industries where the team’s views on industry fundamentals differ from consensus estimates. Earlier in her career, she spent nine years on the marketing and investor relations team at Eton Park Capital Management, a multi-strategy investment firm.  Ms. Michaels began her career at Goldman Sachs in 1998 where she worked in investment banking and private equity in both New York and London.

MidOcean invests in middle-market companies that are active in the business and consumer services sectors. In September 2018, MidOcean held a final close of its latest fund, MidOcean Partners V LP, at its hard cap of $1.2 billion in limited partner commitments. The new fund was oversubscribed and closed above its original $1 billion target. MidOcean Credit Partners was launched in 2009 and manages over $8 billion of capital across a range of credit strategies.  MidOcean was founded in 2003 and is based in New York (www.midoceanpartners.com).

© 2019 Private Equity Professional | September 26, 2019