Mill Point Builds Transformer Biz

Pioneer Transformers, a portfolio company of Mill Point Capital, has acquired Power Partners from OpenGate Capital. OpenGate acquired Power Partners in January 2016 from Athens, Georgia-based PPI.

Power Partners is a designer and manufacturer of pole-mount and pad-mount power transformers that are used in a range of applications including power lines, factories, airbrake systems, carbon-neutral buildings, retail stores, businesses, and construction.

The company was founded in 1958 and over its history has produced more than 8.5 million transformers that have been sold throughout the US, Mexico, and Caribbean. Power Partners, led by President Justin Smith, has more than 330 employees and is headquartered 60 miles east of Atlanta in Athens, Georgia.

“The acquisition of Power Partners is highly complementary to Pioneer as it dramatically diversifies Pioneer’s customer base, adds a natural extension to Pioneer’s existing product suite and results in a primarily replacement-driven revenue base,” said Dustin Smith, a partner at Mill Point. “We identified Power Partners as an attractive opportunity for Pioneer prior to making our initial investment, and we are thrilled that Power Partners and its leadership team are joining the Mill Point family of companies.”

Mill Point formed Pioneer Transformers in July 2019 to acquire the power transformer divisions of Pioneer Power Solutions for $60.5 million in cash and a $5 million seller’s note. The acquired divisions included Pioneer Transformers, Pioneer Dry Type Transformer Group, Jefferson Electric, Bemag Transformer, and Harmonics Limited.

Today, 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.

“Justin Smith, the president of Power Partners, and his team have done an exceptional job implementing lean manufacturing processes and optimizing their operations to create a highly-efficient pole-mount and pad-mount transformer business,” said Antony Besso, the executive chairman of Pioneer and an executive partner of Mill Point. “By combining Power Partners with the existing Pioneer platform, we have created a leading pure-play transformer company in North America, enabling us to better serve all customers.”

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 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 City.

OpenGate acquires non-core divisions of larger corporations that have revenues from $50 million to $1 billion. The EBITDA of the divisions can be negative, break-even, or positive. The firm was founded in 2005 and is headquartered in Los Angeles with an additional office in Paris.

© 2019 Private Equity Professional | November 25, 2019

Print Friendly, PDF & Email