Genstar Capital has acquired a majority equity interest in Truck-Lite, a provider of safety lighting, filtration systems and telematics services for commercial vehicles, from BDT Capital Partners and Koch Equity Development. Penske Corporation is remaining as a minority investor in the company in partnership with Genstar.
Truck-Lite was founded in 1955 and was acquired in 1997 by Penske with backing from General Electric. Private equity firm Kelso & Co. acquired a 49% equity interest in Truck-Lite in 2010 before exiting its investment through a sale to BDT and Koch Equity in 2015.
Truck-Lite is a producer of forward and safety lighting, wiring harnesses, turn signal switches and safety accessories for the medium- and heavy-duty truck, trailer and commercial vehicle industries.
The company also designs and manufactures the Road Ready telematics systems for heavy- and light-duty trailers and off-road industrial usage; fuel filtration and water separation systems (through its Davco subsidiary); and rugged LED lighting for the off-road and marine industries (through its Lumitec and Rigid Industries subsidiaries).
Truck-Lite has an annual EBITDA of more than $100 million according to industry sources. The company, led by CEO Brian Kupchella, is constructing a new global headquarters in the Detroit suburb of Southfield, Michigan, and has eleven additional facilities in New York; Pennsylvania (4); Michigan (Davco); Florida (Lumitec); Arizona (Rigid Industries); United Kingdom; Mexico; and China.
“We are very excited to partner with Genstar,” said Mr. Kupchella. “We believe its investment philosophy aligns extremely well with Truck-Lite’s long-term strategy and will allow us to accelerate our growth plans, continue to invest in new products and markets, and improve our value proposition to our customers and partners.”
San Francisco-based 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.
“Truck-Lite has a leading position in attractive market segments, with a history of innovation, product development and industry superior technology,” said Rob Rutledge, a managing director at Genstar. “For over 60 years they have worked to build strong brand recognition and we see an opportunity to support the continued expansion of the business through growth in new products, technologies, and Truck-Lite’s Road Ready telematics systems and look to further expedite that growth by pursuing strategic acquisitions.”
“Truck-Lite serves as a valuable partner to many of the world’s largest commercial vehicle fleets, OEMs and distributors,” said Patrick Conroy, the chief financial officer of Penske and a member of the Truck-Lite board of directors. “Truck-Lite has a strong history of developing new innovations that make them leaders in providing technologically advanced products that allow truck fleets to operate with improved safety and reduced costs. We look forward to continuing our relationship with Truck-Lite and supporting Genstar to accelerate Truck-Lite’s growth.”
Penske is a closely-held, diversified, on-highway, transportation services company with interest in retail automotive, truck leasing, transportation logistics, and professional motorsports. The company’s combined businesses have revenues of more than $32 billion, more than 64,000 employees, and operations at more than 3,600 locations. Penske is headquartered near Detroit in Bloomfield Township, Michigan.
BDT Capital Partners was founded in 2009 by Byron Trott, the former vice-chairman of Goldman Sachs. The firm manages more than $9 billion across its committed funds as well as $3.7 billion of co-investments from its limited partners. The firm is a bit secretive and does not have a web presence but does maintain offices in Chicago, New York, London, and Frankfurt.
Koch Equity Development (KED) is part of Koch Industries, one of the largest privately-held businesses in America, with estimated annual revenues as high as $100 billion. KED operates from offices in Wichita, Kansas and London, UK.
MidCap Financial was the Administrative Agent, Joint Lead Arranger, and Joint Bookrunner for a senior secured credit facility that supported Genstar’s buy of Truck-Lite. MidCap’s deal team was led by Rodney Craig. MidCap Financial, in alliance with its investment manager Apollo Capital Management, is a middle-market focused finance firm that provides debt instruments of $10 million to $750 million to companies across all industries.
© 2019 Private Equity Professional | December 20, 2019