MiddleGround Grabs Fourth Platform with Banner Buy

MiddleGround Capital has acquired Banner Industries, a processor and distributor of metal bar products.

Banner has more than 200,000 square feet of production floor space and maintains a metals inventory of more than 4,000 tons. The company was founded in 1961 and is headquartered near Chicago in Carol Stream, Illinois with additional facilities in Ohio, North Carolina, Indiana, and Texas.

Banner Industries operates through two divisions – Banner Service Corporation and Banner Medical Innovations.

Banner Service (BSC) is a value-added distributor of carbon and stainless steel, aluminum, brass, titanium, and other exotic materials. The divisions’ value-added metal services include straightening, turning, grinding, chamfering (beveling), chrome-plating, line marking, polishing, and non-destructive testing. The customers of BSC include industrial businesses and steel service centers that are active in the irrigation, diesel fuel systems, electric motors, agriculture, aerospace, and automotive sectors.

Banner Medical (BMI) processes medical-grade metals for device manufacturers in orthopedic, spine, dental, and other medical fields.

MiddleGround Capital makes control equity investments from $25 million to $65 million in North American-based business-to-business companies in the industrial and specialty distribution sectors that have enterprise values of up to $200 million. The firm was formed in May of 2018 by former Monomoy Capital professionals John Stewart, Lauren Mulholland and Scot Duncan.

“Banner is a proven leader serving a critical role within the metals supply chain and has an impressive history of growth,” said Mr. Stewart. “We are excited to partner with the Banner team to further expand the business, both organically and through strategic add-on acquisitions.”

The buy of Banner is the fourth platform investment for the firm’s inaugural private equity fund, MiddleGround Capital I LP, which had a final close in September 2019 with $459.5 million of capital.

The three earlier platform acquisitions include Alco Manufacturing, a Elyria, Ohio-based maker of steel, aluminum, and brass connectors used in industrial and consumer applications (acquired in July 2018); Peterson Spring, a Southfield, Michigan-based maker of springs and wire forms for automotive OEMs, motorsport/racing and industrial companies (acquired in April 2019); and Steel Craft, a Hartford, Wisconsin-based provider of outsourced manufacturing services including fabrication, welding, stamping and coating (acquired in May 2019).

“We were looking for a partner who had the right operational experience and shared the same strategic vision,” said Banner president and CEO Mark Redding. “We have found that in the MiddleGround team and look forward to working together as we continue to grow and serve our customers.”

MiddleGround is headquartered in Lexington, Kentucky with an additional office in New York City.

© 2020 Private Equity Professional | January 10, 2020

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