Main Street Capital has formed Compass Precision as a new holding company to acquire businesses in the precision metal manufacturing industry.
The new platform has closed on three acquisitions with the October 2019 buys of Quality Products & Machine; Advanced Machining & Tooling; and Tri-Tec Industries.
All three companies are located in and around Charlotte, North Carolina, and were acquired from ZP Enterprises, an Atlanta-based private equity firm led by Steve Zelnak, the former chairman and CEO of Martin Marietta.
Quality Products manufactures complex prototype and low-to-mid volume metal parts that are used in the power generation, defense, and light rail sectors. The company’s capabilities include CNC milling and turning, laser cutting, metal forming, welding, and assembly. Quality Products was founded in 1962 and operates a 45,000 square foot facility in Charlotte, North Carolina.
Advanced Machining & Tooling is a precision machining and manufacturing company that specializes in prototypes and low to mid-volume OEM production of parts used in the power generation, aerospace, medical, defense and automotive sectors. The company’s capabilities include CNC milling and turning, electrical discharge machining (EDM), CAD and CAM, coordinate measurement, and grinding. The company was founded in 1985 and operates a 10,000 square foot facility in Salisbury, North Carolina.
Tri-Tec Industries provides precision machining and light fabrication services and specializes in low to mid-volume OEM components and parts manufacturing. The company’s capabilities include CNC milling and turning, welding, dimensional inspection, and grinding. Tri-Tec was founded in 1997 and operates an 18,000 square foot facility in Charlotte, North Carolina.
Main Street has appointed Gary Holcomb as the president and chief executive officer of Compass Precision. Mr. Holcomb has over twenty-five years of experience in the metal forming industry and from 2004 to 2011 he was the president and CEO of Coining, a New Jersey-based manufacturer of precision stampings and preforms used in the electronics industry. Coining was acquired by Main Street in 2001 and sold to Chattanooga, Tennessee-based River Associates Investments (RAI) in 2007. In 2011, RAI sold Coining to publicly traded AMETEK.
“We’re very pleased to add the Compass Precision group of companies to our portfolio. It’s a fundamentally sound group of businesses with a breadth of manufacturing capabilities and strong customer relationships,” said Dennis Prado, a managing partner at Main Street. “We are thrilled to be partnering with Gary Holcomb and the existing management team, and we intend to make sure they have the resources needed to grow and expand. The industry is highly fragmented and there are a lot of precision metal companies that would fit well with Compass Precision.”
Main Street Capital invests in North American-based companies that have enterprise values of $10 million to $125 million and at least $2 million of EBITDA. Sectors of interest include food products, industrial manufacturing, electronics, metallic alloy parts manufacturers, specialty or niche manufacturing, and value-added distribution. The firm, founded in 1994, is led by Dennis Prado and Ryan Davis and is based in Pittsburgh.
“I am extremely excited about the opportunity to lead Compass Precision and work with a talented team of managers,” said Mr. Holcomb. “I am also excited to again be working with Main Street. They have significant experience in the precision metal industry, and they are the right partner to help facilitate growth through both organic initiatives and add-on acquisitions.”
Main Street is actively pursuing additional add-on acquisitions for Compass Precision.
© 2019 Private Equity Professional | December 18, 2019
